Air cargo slumps
The air cargo market has tapered off substantially this year after a strong rebound in 2010.
September was the fifth straight month that freight volumes contracted. Air freight was down 2.7 percent compared to September 2010, after declining 2.4 percent in August, according to the International Air Transport Association.
The direction of air freight is the opposite of passenger traffic, which picked up 5.6 percent from the prior year and improved from August’s 4.6 percent gain.
The level of air cargo business is a reflection of the weak global economy, especially in Europe and the United States. But once-hot Asian economies are also losing steam.
Freight volumes deteriorated 5 percent between the end of the first quarter and September. Asia-Pacific carriers were the hardest hit with a 6.3 percent decline in demand. IATA said the lingering effects of supply chain disruptions from last spring’s Japanese earthquake-tsunami disaster continue to dampen air freight demand.
European carriers experienced a 2.4 percent decline in traffic while North American carriers said traffic was flat.
Airline executives expect a significant drop in corporate profits over the next year as unit costs increase without commensurate yield gains, according to a recent IATA survey of business confidence. Respondents were split on whether cargo yields will stay the same or go down.
IATA said it expects industry profits to fall from $6.9 billion in 2011 to $4.9 billion in 2012, with a profit margin of only 0.8 percent.
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