Loading

Air cargo to enjoy highest growth since 2010, but huge structural overcapacity still exists

In the nine months to Sep-2017 world air freight traffic, measured in freight tonne kilometres, increased by 10.1% year-on-year, according to data from IATA. The increase for the month of Sep-2017 was 9.2% year-on-year, a deceleration from 11.6% in Aug-2017, and IATA postulated that freight traffic growth may have passed its cyclical peak.

Nevertheless, it seems probable that full year growth in 2017 will exceed IATA's forecast of 7.5%, making it the highest since it reached 19.4% in 2010. Growth in cargo traffic has been much faster than capacity growth, driving an increase in cargo load factor.

However, at just 44.4% for the first nine months of the year (broadly where it has been for years), cargo load factor should be seen as unacceptably low. Put another way, this statistic means that air cargo supply is more than twice the level of demand. In passenger belly space, the situation is even worse: only 27% of capacity is typically filled.

Little wonder that air cargo suffers from chronic yield weakness. This may be a relatively good year for air cargo, but it will not remove the huge structural overcapacity problem.

This CAPA Premium Analysis article is 1,690 words.

To access CAPA Premium Analysis you need a CAPA Membership

Your window into the latest insights

CAPA employs an industry-leading Analyst team based in Europe, North America, Asia and Australia who offer unique perspectives and independent and accurate commentary of critical industry developments globally. CAPA Members rely on our Analysis to unlock valuable insights and actionable intelligence to keep ahead of the game.

Big picture strategic view

Our Analysts don’t just report the news - they take a big picture strategic view of aviation dynamics, issues and trends and analyse the implications of these developments for you.

Global intelligence

The CAPA Analyst team is based globally to ensure our CAPA Members have access to independent, unique perspectives covering an entire spectrum of daily, worldwide commercial aviation developments.

Customise your Alerts

CAPA Members can use CAPA Alerts to receive daily, weekly or monthly and customised updates on our Analysis.

I'm very impressed by the factual and detailed analysis CAPA is always doing.

- CEO, Airline Member
To learn more, contact us:
Phone: +61 2 9241 3200 | Email: membership@centreforaviation.com