Global air freight demand up 5.9 percent in October: IATA

by Susie Olson December 6, 2017, 0:34
Global air freight demand up 5.9 percent in October: IATA

The ease of doing business introduced by the Federal Government is paying off as the International Air Transport Association (IATA), the clearing house for over 280 global airlines, said business confidence levels in Nigeria near a three-year high.

"As expected, the recent severe weather in the Americas region had only a temporary impact on the healthy travel demand we have seen this year, and we remain on course for another year of above-trend growth", Alexandre de Juniac, IATA director general and CEO, said.

IATA has estimated 2018 airline capacity growth to be 3.4 percent for North America, just shy of the region's forecast traffic growth of 3.5 percent. It will on Tuesday present its updated economic forecasts for the industry at a media event in Geneva.

In response to the tougher conditions regional carriers have cut costs and unprofitable routes, with Dubai carrier Emirates reporting a 111 per cent increase in profit to $214m in the April 1 to September 30 period after a 75 per cent slump in the first half of its previous fiscal year.

Rising fuel prices have also hit US airlines, but high demand and improving economies in Europe have helped trigger profit in airlines worldwide, an IATA economist told Reuters. Outbound worldwide traffic continues to uphold growth movement in the sector, but inbound traffic to North America is reportedly being deterred by additional security measures inherent with traveling to the US, IATA noted. The inventory-to-sales ratio in the USA is looking sideways, thereby indicating that the period when companies look to restock inventories quickly-which often gives air cargo a boost-has ended.

That's according to research by IATA, the International Air Transport Association. Capacity grew 9.1 percent, but load factor decreased.3 percent.

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Demand will also overtake expected capacity growth of 5.7 per cent.

Unique city pairs served by airlines grew to over 20,000 in 2017, +1,351 on 2016 and double the 10,000 city pairs served in 1996. Cargo revenues will continue to do well in 2018, reaching $59.2bn, up 8.6 per cent from expected 2017 revenues of $54.5bn.

"Per passenger, airlines on average will make less than $9 and the net margin of 4.7 per cent is hard won", he added.

"The focus is really on the pressure from cost (increases)", said Pearce.

The average net profit per departing passenger will also rise slightly to $8.90 next year, from $8.45 in 2017. We have a clear strategy that is delivering results on environmental performance.


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