IATA highly critical of UK and US electronics ban

Recently introduced bans on the carriage of certain electronic devices on United States and United Kingdom bound flights is not an acceptable long-term solution to aviation safety, the International Air Transport Association (IATA) says.

IATA has slammed the UK and US governments’ electronics bans, which requires passengers to check in all personal electronic devices larger than a smartphone on nonstop flights from a number of Middle East and North African countries.

“The current measures are not an acceptable long-term solution to whatever threat they are trying to mitigate,” IATA chief executive and director general Alexandre de Juniac said on Tuesday in a speech to the Montreal Council on Foreign Relations.

“Even in the short term it is difficult to understand their effectiveness. And the commercial distortions they create are severe.

“We call on governments to work with the industry to find a way to keep flying secure without separating passengers from their personal electronics.”

The US ban applies to passengers on flights from Jordan, Egypt, Turkey, Saudi Arabia, Kuwait, Morocco, Qatar and the United Arab Emirates, with laptops, tablets, e-readers, cameras, portable DVD players, electronic game units and travel printers and scanners required to be transported as check-in luggage.

Smartphones and medical devices will be permitted to be carried on board the aircraft.

The UK government quickly followed with a similar ban. However, it only applied to six countries – Egypt, Jordan, Lebanon, Saudi Arabia, Tunisia and Turkey.

de Juniac criticised the lack of consultation with airlines prior to the ban being implemented.

“With the measures now in place, our passengers and member airlines are asking valid questions,” de Juniac said.

“Why don’t the US and the UK have a common list of airports? How can laptops be secure in the cabin on some flights and not others, including flights departing from the same airport?

“And surely there must be a way to screen electronic equipment effectively? The current situation is not acceptable and will not maintain the all-important confidence of the industry or of travellers. We must find a better way. And Governments must act quickly.”

de Juniac reiterated IATA’s call for better information sharing and coordination on security measures among governments and with the industry.

“While governments have the primary responsibility for security, we share the priority of keeping passengers, crew and aircraft secure,” de Juniac said.

“To do that effectively intelligence is king. And it needs to be shared amongst governments and with the industry. It’s the only way to stop terrorists before they get near an airport, let alone aircraft.”

 

Australian Aviation

Pace of passenger growth slowed slightly in October, while freight volumes improve

Growth in global air traffic slowed slightly in October while cargo volumes expanded at the fastest pace in 18 months, new figures show.

The International Air Transport Association (IATA) monthly reports on the passenger and freight markets showed passenger demand, measured by revenue passenger kilometres (RPK), rose 5.8 per cent in October compared with the prior corresponding period.

While October was down slightly from the 7.1 per cent improvement recorded in September, the result was broadly in line with 10-year averages, IATA said.

And with capacity, measured by available seat kilometres (ASK) rising by more than demand at 6.3 per cent, load factors slipped 0.4 percentage points to 80.1 per cent.

Growth in RPKs was highest among airlines in Latin America (7.1 per cent), Middle East (seven per cent) and Asia Pacific (also seven per cent), while the smallest increase came from carriers in North America where demand improved 2.4 per cent.

IATA said the Middle East carriers’ seven per cent improvement in RPKs was the the region’s slowest pace of demand growth in 18 months.

While IATA noted the timing of some regional celebrations may have affected the results, the Middle East carriers’ international load factor of 70.1 per cent was the lowest October result since 2006.

“In seasonally adjusted terms, traffic has barely grown since July,” IATA said of the Middle Eastern airlines.

“Middle Eastern international load factors are under pressure.”

IATA director general and chief executive Alexandre de Juniac said: “While the negative traffic impact from terror attacks and political instability in parts of the world has receded, the long downward trend in yield – which helped to stimulate travel – has leveled off.”

“Furthermore, the recent OPEC agreement to restrict oil production suggests fuel prices have ended their slide.”

IATA said its the majority of respondents to its business confidence survey said they expected passenger yields to remain unchanged in the year ahead, while costs were tipped to go up.

“The upshot is that our respondents expect profit margins to come under pressure going into the new year,” the IATA report said.

In October, Qantas reported revenues for the three months to September 30 were down three per cent compared with the prior corresponding period as increased competition on international routes and a subdued domestic demand environment pointed to a weaker 2016/17 first half result.

Also, Virgin Australia reported a 2016/17 first quarter loss amid a sluggish domestic market affected revenues.

IATA figures showed the Australian domestic market grew capacity, measured by available seat kilometres (ASK) a slender 0.1 per cent in October, compared with the prior corresponding period, while RPKs were up 2.2 per cent.

As a result, load factors climbed 1.7 percentage points to 80.4 per cent.

The IATA report said any upward trend in RPKs remained “very modest”, given passenger traffic had increased at an annualised pace of less than one per cent over the past three years.

“The load factor remains well below the record high for the month that was reached in 2007,” IATA said of the Australian domestic market.

IATA, which has about 260 member airlines and represents roughly 83 per cent of global air traffic, also reported freight volumes had improved in October, with freight tonne kilometres (FTK) rising at the fastest pace in 18 months at 8.2 per cent.

Capacity, measured by available FTKs (AFTK), rose 3.6 per cent.

de Juniac said there were some “encouraging signs” in the freight market amid indications of a pick-up in new export orders.

However, the IATA chief executive cautioned there were still headwinds from weak global trade.

“Global air freight markets look set to end 2016 on a high note,” de Juniac said.

“We will enter 2017 propelled by some much-needed positive momentum.”

“The drivers of stronger growth are sending a major signal for change to the air cargo industry. Whether it is e-commerce or the trade in pharmaceuticals, shippers are demanding more than current paper processes can support. The shift to e-freight is more critical than ever.”

 

Australian Aviation

Passenger growth hits seventh-month high in September

777-200LR_C-FIUF_SYDNEY_25APRIL2015_SETH JAWORSKI-2

Global air traffic grew at its fastest pace in seven months in September as lower airfares spur demand, new figures show.

The International Air Transport Association (IATA) monthly report showed passenger demand, measured by revenue passenger kilometres (RPK), rose 7.0 per cent in September, compared with the prior corresponding period. It was the highest result since February.

There was double-digit growth in RPKs among airlines in the Middle East (11 per cent) and Asia Pacific (10.2 per cent), with the smallest increase coming in North America, where demand was up a still decent 4.2 per cent.

While terrorist activity and some regional economic jitters continued to act as headwinds for aviation, travellers were increasingly being tempted by bargain basement ticket prices.

“Air passenger demand has been stimulated by lower airfares, reflecting the lagged effects of lower oil prices and broader competitive pressures in the market,” the IATA report said.

However, IATA cautioned that the “biggest stimulus from this factor may not be behind us” as airlines seek to stabilise yields.

“Certainly, the steep downward trend in yields that was a feature of early 2016 has paused in recent months and the majority of respondents to our latest quarterly business confidence surgery reported that they expect passenger yields to remain unchanged in the year ahead.

“This contrasts with the results from the previous surgery, when the majority of respondents expected further falls in yields over the year ahead.”

IATA figures showed the Australian domestic market grew capacity, measured by available seat kilometres (ASK) a slender 0.5 per cent in September, compared with the prior corresponding period, while RPKs were up 4.2 per cent.

As a result, load factors climbed 2.9 percentage points to 80.3 per cent.

The IATA report said any upward trend in RPKs remained “very modest”, given passenger traffic had increased at an annualised pace of just 1.1 per cent over the past three years.

IATA chief executive and director general Alexandre de Juniac welcomed the healthy growth in passenger traffic in September.

“Importantly, this rebound from August weakness suggests that travel demand is showing its resilience in the aftermath of terror attacks,” de Juniac said in a statement.

“We must, of course, be ever-alert to the ongoing terror threat. And overall the industry is still vulnerable to being buffeted by rising geopolitical tensions, protectionist political agendas, and weak economic fundamentals.

“This will still be a good year for the airline industry’s performance, but our profitability will continue to be hard-won.”

IATA has about 260 member airlines and represents roughly 83 per cent of global air traffic

Australian Aviation

Passengers increasingly embracing self-service options

Virgin Australia's new home at Perth Airport's T1 Domestic Pier features self-service and staff-assisted checkin. (Jordan Chong)

 

More than seven in 10 air travellers now board their flight with a mobile boarding pass as the trend towards self-service checkin and off-site passenger facilitation grows, new figures show.

The International Air Transport Association’s (IATA) 2016 global passenger survey found travellers today were willing to take advantage of advances in technology to do more traditional airport processes before they turn up at the airport.

The survey showed 71 per cent of passengers checked-in online and used a mobile boarding pass rather than a printed one. The figure was up two percentage points from 2015.

“Passengers want convenience and quick results with their bookings and check-in, a seamless and secure airport experience and uniquely tailored experiences throughout their journey,” IATA senior vice president for airport, passenger, cargo and security Nick Careen said in a statement.

“They are ready to embrace the benefits of new technology when it comes to enhancing their travel experience.

“Airlines and airports that recognise this and provide passengers with easy-to-use mobile services, self-service options and one-stop security checks will improve the travel experience and passenger satisfaction.”

As far as what they didn’t like about air travel, the IATA survey highlighted airport security and border control as the “two biggest pain points when travelling”.

“The top frustrations were the wide variation in security screening procedures at different airports and the intrusiveness of having to remove personal items,” IATA said.

“A majority of passengers only want to pass through security and border control once during their journey.”

In terms of baggage handling, 61 per cent of respondents said they would be interested in tracking their bags throughout the journey, while 33 per cent of those surveyed wanted to be able to self-tag their checkin luggage and 39 per cent were in favour of electronic bag tags.

To make travelling to the airport less stressful, 26 per cent advocated having their luggage picked up from home and delivered to the airport, while 24 per cent said they wanted to drop off their checkin bags away from the airport.

And once they are on board, 51 per cent of flyers said they wanted to use their own devices to access entertainment options.

Meanwhile, IATA said global passenger traffic was expected to grow to 7.2 billion in 2035, from about 3.8 billion forecast to travel in 2016.

The bulk of that expansion was tipped to come on routes to, from and within the Asia Pacific region, which were expected to grow on average 4.7 per year over the next 20 years to 3.1 million passengers.

IATA said China would overtake the United States as the world’s largest aviation market, with 817 million new passengers tipped to take flight between now and 2035, resulting in a total market size of 1.3 per cent.

And India was tipped to jump to third place, pushing the United Kingdom down into third place.

However, IATA cautioned that the rise in protectionism in recent times may threaten the growth in aviation and deny nations the benefits of increased air links in an increasingly connected world.

“Economic growth is the only durable solution for the world’s current economic woes,” IATA chief executive and director-general Alexandre de Juniac said in a statement.

“Yet we see governments raising barriers to trade rather than making it easier. If this continues in the long-term, it will mean slower growth and the world will be poorer for it.”

de Juniac also expressed fears infrastructure constraints may also act as a handbrake on growth.

“There is no getting around the need to be both smart and quick in growing airport and airspace capacity,” de Juniac told the World Passenger Symposium in Dubai in prepared remarks.

“I fear that we may be headed for an infrastructure crisis that will impact air travelers.

“Inadequate infrastructure negatively impacts the passenger experience in the form of flight delays, longer routes and inefficient schedules. Then there is the cost to economies of lost business opportunities, employment and social development. Remember aviation is a critical catalyst for economic and social development, supporting 63 million jobs and some $2.7 trillion in economic impact.”

The IATA global passenger survey was conducted by PwC and comprised responses from 6,920 passengers from some 145 countries.

The association has about 260 member airlines and represents roughly 83 per cent of global air traffic

 

Australian Aviation

International Air Transport Association says passenger growth slowing

While passenger demand, measured by revenue passenger kilometres (RPK), rose by 5.2 per cent in June, compared with the prior corresponding period, IATA said the “upward trend in seasonally-adjusted traffic has moderated since January”.

And with available seat kilometres (ASK) rising by more than demand at 5.6 per cent, load factors slipped 0.3 percentage points to 80.7 per cent.

“The loss of momentum can be attributed partly to the ongoing and cumulative impacts of recent high-profile terrorist attacks, which have weighed on international European traffic in particular,” IATA said.

“Typically, the impact of such shock events is just transitory, but the repeated nature of recent events suggests that the effects may be longer-lasting this time.

“More generally, the fragile and increasingly uncertain global economic backdrop continues to present a headwind to passenger demand as well.”

IATA figures showed the decisions from Qantas and Virgin Australia to adjust capacity in the Australian domestic market had resulted in a 3.6 per cent decline in available seat kilometres (ASK) in June, compared with the prior corresponding period. And with demand, measured by RPKs, up 2.8 per cent, load factors climbed 4.9 percentage points in the month to 79.4 per cent.

“Capacity in Australia has also been cut sharply over the past few months, reflecting wide-scale changes to the domestic network including much fewer frequencies and smaller aircraft,” IATA said.

“Demand has picked up in recent months.”

On a positive note, IATA said lower airfares due to the declines in the cost of fuel had encouraged more people to travel and this stimulus was expected to continue through to the end of 2016

“The demand for travel continues to increase, but at a slower pace,” IATA chief executive Tony Tyler said.

“The fragile and uncertain economic backdrop, political shocks and a wave of terrorist attacks are all contributing to a softer demand environment.”

IATA has about 260 member airlines and represents roughly 83 per cent of global air traffic.

 

Australian Aviation

Incoming IATA CEO calls on government to adopt policies that keep pace with challenges airlines face

Alexandre de Juniac speaks to IATA delegates after being confirmed as chief executive.

Alexandre de Juniac speaks to IATA delegates after being confirmed as chief executive.

IATA is heading to Cancun in 2017.

Incoming International Air Transport Association (IATA) chief executive and director general Alexandre de Juniac says how the industry deals with government will be a major focus of his leadership.

de Juniac, named as Tony Tyler’s successor in April, was officially confirmed at the association’s next boss on the final day of the IATA annual general meeting in Dublin on Friday.

The Air France-KLM chief executive, who takes up the role in September and is IATA’s seventh chief executive and director general, outlined five key areas that he would target as IATA chief executive.

“First, drive forward important initiatives to simplify the business. Second, advocate for smarter regulation. Third, improve infrastructure. Fourth, manage our climate change impact, and fifth drive efficiencies across the value chain,” de Juniac told delegates in his speech after being officially confirmed.

He also put governments around the world on notice that they needed to do their bit to support the global aviation industry.

“One of our most important partnerships is with government, where I have spent part of my career,” de Juniac said.

“I understand how governments operate, but let me reassure you I am very far from patient with the speed at which they work and I shall be a tireless advocate for government policies to keep pace with the challenges that you, IATA’s members, face.”

de Juniac paid tribute to Tyler’s leadership over the past five years.

“I will inherit an organisation that Tony has reshaped to be close to its members and effective in delivering the value that they expect to their global association,” de Juniac said.

“I particularly look forward to working with the strong IATA team that Tony has built.”

“Under Tony’s leadership IATA has embarked on major programs that will have a transformational impact on our industry.”

In other leadership changes at IATA, International Airlines Group (IAG) chief executive Willie Walsh was named as the airline industry group’s new chairman, replacing Aeromexico chief executive Andres Conesa. IAG is the parent company for British Airways, Iberia and Vueling.

Meanwhile, the Mexican resort city of Cancun was named as the venue for the 2017 AGM, with flag carrier Aeromexico the host airline.

It will be the third time the IATA AGM would be held in Mexico, with Mexico City hosting the event in 1994 and 1966.

Conesa said he looked forward to welcoming delegates to Cancun.

“Delegates will find a vibrant economy in which aviation plays a key role,” Conesa said in a statement.

“The industry’s footprint in Mexico includes some 156,000 jobs and $4 billion in economic activity. Ambitious infrastructure developments supported by a strategic location at the center of the Americas will ensure a growing role for Mexican aviation on the global stage.”

 

Australian Aviation

IATA forecasts US$40 billion in airline profits in 2016

777-200LR_C-FIUF_SYDNEY_25APRIL2015_SETH JAWORSKI-2

International carriers at Sydney Airport. (Seth Jaworski)

The world’s airlines are collectively expected to post close to US$40 billion in profits in calendar 2016 as lower oil prices and demand for air travel buoy the bottom line.

The forecast, presented by International Air Transport Association (IATA) chief executive Tony Tyler at the industry body’s annual general meeting in Dublin on Thursday, was an improvement from the estimated profit of US$36.3 billion that was published in December 2015.

The result would be achieved on revenues totalling US$709 billion, representing a net profit margin of 5.6 per cent.

IATA said the return on invested capital of 9.8 per cent would exceed the cost of capital (forecast to be 6.8 per cent) for a second straight year.

Tyler said the mood of the industry was “generally optimistic”, with airlines producing solid results despite some economic headwinds.

And while passenger markets were growing robustly, with load factors at record levels, Tyler noted the cargo market was stagnating.

Tyler said the industry was “probably nearing the peak of the positive stimulus from lower prices”.

“Lower oil prices are certainly helping — though tempered by hedging and exchange rates,” Tyler said in his speech to delegates at the IATA AGM on Thursday.

“And your hard work is strengthening the business. Load factors are at record levels. New value streams are increasing ancillary revenues. And joint ventures and other forms of cooperation are improving efficiency and increasing consumer choice while fostering robust competition.”

On a region-specific basis, IATA said airlines in Asia-Pacific were tipped to record US$7.8 billion in 2016, compared with US$7.2 billion the prior year. The region was the second-best performing in the world in terms of profitability, IATA’s forecast showed. Capacity was expected to grow by 9.1 per cent, a little ahead of demand growth of 8.5 per cent.

Meanwhile, North American carriers continue to lead all regions in terms of making money, with profits of US$22.9 billion expected in 2016.

IATA estimated fares would fall by about seven per cent this year, which Pearce suggested was in line with the declines in the price of fuel.

“There has been some price stimulation most recently from the fall in fuel prices and we think there is more to come because the impact of hedging has delayed the benefits of the fuel price falls we saw last year coming through to airline costs,” IATA chief economist Brian Pearce said at the IATA AGM in Dublin on Thursday.

On a negative note, IATA said cargo markets remained “in the doldrums”, with revenue likely to fall to US$49.6 billion, from US$52.8 billion in 2015. Demand was expected to grow a slender 2.1 per cent in 2016 amid significant capacity additions due to the increase in passenger fleets to meet demand for air travel.

As a result, cargo yields were expected to fall eight per cent in 2016.

“Bottom line is, it is a difficult business for cargo,” Pearce said.

“Just emphasising how tough a business it’s been, this year we are expecting cargo revenues to be back where they were 10 years ago.

“That’s a combination of weakness of international trade and also the falling cost of air cargo.

“Passenger business in contrast is double what it was in revenue terms 10 years ago.”

IATA economics chart on cargo. (IATA)

IATA economics chart on cargo. (IATA)

IATA economics chart on cargo. (IATA)

Australian Aviation

Airlines adding capacity amid strong growth in passenger demand

McDonnell Douglas MD-11 aircraft picture

There are signs the surge in demand for air travel at the start of 2016 has prompted airlines to boost flights and add extra seats, new figures suggest.

The International Air Transport Association (IATA) says the airlines experienced a 8.6 per cent increase in demand, measured by revenue passenger kilometres (RPK), in February 2016, compared with the prior corresponding period, while capacity, or available seat kilometres (ASK), rose 9.6 per cent in the month.

As a result, load factors fell 0.7 percentage points to 77.8 per cent.

IATA chief executive Tony Tyler said passenger demand at the start of 2016 was the strongest in eight years. However, the capacity increase in February was worth monitoring in the period ahead.

“February was the first month since the middle of 2015 in which capacity growth exceeded demand, which caused the global load factor to decline,” Tyler said in a statement.

“It is unclear whether this signals the start of a generalized downward trend in load factor, but it bears watching.”

Among Asia Pacific carriers, international passenger traffic rose 11.2 per cent in February, compared with a 10.3 per cent lift in capacity. As a result load factors rose 0.7 percentage points to 78.3 per cent.

“Slower economic growth in many of the region’s economies has been at least partly offset by the 7.3 per cent increase in the number of direct airport connections within the region, which has helped to stimulate passenger demand,” IATA said of the Asia-Pacific region.

The largest growth in ASKs came in the Middle East, where international capacity rose 16.9 per cent. However, passenger demand grew only 11.3 per cent, resulting in a 3.7 percentage point decline in load factors to 73 per cent in February, continuing a recent trend.

“Annual traffic growth has now lagged behind capacity growth for six consecutive months, and load factors have trended downwards in seasonally-adjusted terms since mid-2014,” IATA said of the Middle East region.

Figures for the some of the larger domestic markets showed Australian carriers grew capacity 5.2 per cent in February, while demand measured by RPKs was up 4.6 per cent. Load factors eased 0.4 percentage points to 74.3 per cent.

Meanwhile, IATA said cargo volumes, measured by freight tonne kilometres, (FTK) grew 5.6 per cent in February.

However, it noted comparisons with the prior year were “heavily skewed” due factors such as the US port strike in early 2015 that temporarily caused a spike in air freight volumes, and the timing of the Lunar New Year, when most factories in Asia are closed, in February 2016.

When the two-month period over January and February was considered, FTKs were up 6.3 per cent compared with a year ago.

Tyler described the state of the freight market as a “difficult one”, with February containing the recent weak trend.

“There are few factors on the horizon that would see this change substantially. In the absence of an imminent resurgence of demand, the importance of improving the value proposition with modernized processes — the e-freight vision — remains a top priority,” Tyler said.

Australian Aviation

Strong demand for air travel in January

A file image of Auckland International Airport taken on December 1 2015. (Mike Millett)

Lower oil prices have helped fuel demand for air travel at the start of what is shaping up as a bumper year for the aviation industry in 2016 despite some economic weakness across parts of the global, new figures suggest.

The International Air Transport Association (IATA) says the airlines experienced a 7.1 per cent increase in demand, measured by revenue passenger kilometres (RPK), in January 2016, compared with the prior corresponding period, while capacity, or available seat kilometres (ASK), rose 5.6 per cent in the month.

As a result, load factors climbed 1.1 percentage points to 78.8 per cent, the highest ever January figure in the monthly IATA survey published on Tuesday (European time).

“All told, underlying conditions continue to point to another strong year of growth for passenger traffic,” the IATA report said.

“While the global economy continues to face downside risks, another year of modest economic growth will not present a major headwind.

“Moreover, although the downward trend in global air fares eased towards the end of 2015, the additional decline in oil prices seen during the final months of last year and into January is likely to provide further stimulus for air travel growth during the course of 2016.”

In December, IATA forecast airlines around the world would collectively generate US$36.3 billion in profits and return their cost of capital in 2016, amid strong demand for passenger travel, lower fuel prices and operational improvements.

The 2016 forecast represented a net profit margin of 5.1 per cent and an increase from the US$33.1 billion profit airlines were tipped expected to post for 2015.

On a regional basis, Asia Pacific airlines represented the largest share of global air passenger traffic with 31.5 per cent, followed by Europe (26.7 per cent) and North America (24.7 per cent). Operators in the Middle East, led by the fast growing trio of Emirates, Etihad and Qatar, carried a 9.4 per cent of world air travel.

African carriers posted the strongest lift in demand, with RPKs up 11 per cent in January, well ahead of capacity growth of 7.1 per cent.

Meanwhile, the Middle East had the largest increase in capacity, with ASKs up 12.8 per cent in the month.

“January maintained the strong traffic growth trend seen in 2015, showing the resilience of demand for connectivity despite recent turmoil in equity markets,” IATA chief executive Tony Tyler said in a statement.

“The record load factor is a result of strong demand for our product and airlines making the most productive use of their assets.

“Underlying conditions point to another strong year for passenger traffic, with the latest decline in oil prices likely providing additional stimulus for air travel growth.”

In terms of domestic air travel, IATA figures showed Australian carriers grew ASKs 2.3 per cent in January, compared with the prior corresponding period, while RPKs were up a healthy 3.8 per cent. As a result, load factors rose 1.1 percentage points to 76.9 per cent.

Those modest figures in the Australian domestic market are in contrast to the booming Indian market, where ASKs jumped 21.9 per cent and RPKs were 22.9 per cent higher in January. And with demand outpacing capacity growth, load factors on Indian domestic flights rose to 84.7 per cent in January, from 84 per cent in the prior corresponding period.

While China also recorded double-digit increases in capacity and demand, the growth rates were about half that of India.

“Growth in India is being propelled by the comparatively strong economic backdrop – India overtook China as the fastest growing major economy in the world in 2015 – and increases in services,” IATA said.

“Meanwhile, although shifts in the timing of Chinese New Year can complicate analysis at this time of year, the upward trend in domestic China traffic remains strong. Overall economic growth in China may have slowed, but business confidence indicators continue to show the services side of the economy is holding up better.”

Australian Aviation

Cargo volumes up in January, but market remains under pressure

B-LIA Cathay Pacific B747-467ERF MEL William Reid 1-3-16 (2)

Asia Pacific accounts for about 39 per cent of all air freight. (William Reid)

Global freight markets have begun 2016 on a positive note, with volumes rising in January at the fastest monthly pace in almost a year, new figures show.

The International Air Transport Association (IATA) said freight tonne kilometres (FTK) were up 2.7 per cent in January, compared with the prior corresponding period. It was the highest rate of freight expansion since April 2015.

However, freight markets continue to suffer from overcapacity, with available freight tonne kilometres (AFTK) rising seven per cent in the month. As a result, freight yields remain under pressure, with freight load factors dropping 1.8 percentage points.

IATA chief executive Tony Tyler said air cargo was going through a tough time.

“It is good news that volumes are growing, but yields and revenues are still under tremendous pressure,” Tyler said in a statement.

Middle East carriers led all regions in terms of freight growth, with FTKs up 8.8 per cent in January amid large-scale network and fleet expansion.

Meanwhile, European and North American airlines reported a 2.5 per cent increase in FTKs. IATA said the North American freight market has fallen away after the 2015 spike in volumes due to the ports strike on the US west coast.

In Europe, IATA said the freight market was expected to struggle in the period ahead.

“Growth may have been flattered by the volatility and weakness seen a year ago,” IATA said of Europe.

“The growth trend for volumes looks weak for the months ahead, so there is a strong possibility that Europe could slip back into negative growth.”

The Asia Pacific freight market, which accounted for about 39 per cent of all air freight, grew by 1.3 per cent in January. The region reported the highest freight load factor at 49.8 per cent, despite the 2.3 percentage point decline in January.

“Emerging Asia trade contracted in the second half of 2015 and in general trade to and from Asia-Pacific is weak,” IATA said.

Africa and Latin American carriers suffered a fall in FTKs in January.

Australian Aviation