Worldwide air cargo demand fell 3% year-over-year (YoY) in the first two months of 2020, a larger decrease than the provisional estimated fall of 2.7%.
Netherlands-based analyst WorldACD added that a yield decrease of around 5% YoY in January/February meant that airlines lost 8% of revenues compared to the start of 2019.
These results were reflected by the Association of Asia Pacific Airlines (AAPA), which also registered a 3% FTK decline amongst its members.
WorldACD, in its latest update, said that the average market figures “shield a starkly different reality from one airline to another”.
It also cautioned that the latest figures do not take into account that February had 29 days this year, “rendering the YoY figures for that month actually a bit flattering”.
On the airline decline in revenues, WorldACD said: “In view of the still fragmented bits of news about March, and the dark expectations for the second quarter of 2020, soon this 8% drop will turn out to be a relatively mild result.”
And as the global aviation industry enters a period of extreme uncertainty about its immediate future, the overall picture is “very bleak,” with the starting positions of individual parties showing large differences.
Stated WorldACD: “The average 3% YoY decrease hides starkly different individual performances, telling a fascinating story of today’s battlefield.”
In Asia Pacific, individual airlines’ YoY performance in the first months of 2020 ranged from -12% to +17% YoY (total for all was -2%).
In Europe, where the total for all airlines was -7%, the range was much bigger, going from -36% for one airline to +42% for another.
In North America, one airline noted a drop of 20%, while another airline grew by 3% (for all, the figure was -7%).
In Middle East & South Asia (MESA), the worst performing airline showed a loss of 23% YoY, whilst the best one could boast of a 17% growth (for the total, the figure stood at 0%).
Worldwide, full freighter airlines as a group did not outperform airlines with passenger aircraft.
Among the world’s top-30 forwarders, said WorldACD, those originating in Asia Pacific jointly lost 9% in YoY volume, with the worst at -17%, but the best at +43%.
The Europeans as a group lost 6.5%, with a spread between -23% and +9%. And the North American forwarders as a group lost 5%, the best among them being at the same level as in the first two months of 2019, and the worst at -21%.
Added WorldACD: “[It is] impossible to say whether the performance in 2020 so far is any indication for each party’s fortunes in the months to come.
“As many airlines reduced their flights to China in February already, capacity constraints led to yields from Europe and North America to China which were not only double the average of the past 12 months, but also higher than the yields in the other direction.
“Nobody can predict for how long such an unexpected development may last. While we brace ourselves for the short-term impact of Covid-19, we all wonder about the long term impact on supply chains, consumer spending and world trade.”
Provisional March data will be available in about two weeks, “giving us much more detailed insights in what no doubt will be an upheaval not witnessed before in aviation”.
The AAPA said its members cargo traffic had held up “remarkably well, despite the effects of extended factory closures and lockdowns in China”, which it said crippled “the supply and distribution of manufactured goods nationwide and related international trade flows”.
These declines were partly offset by higher demand for air shipments of intermediate goods, including pharmaceutical and food supplies, within the region, it pointed out.
Comparatively, offered freight capacity fell by a sharp 13.5%, with belly-hold capacity declining in tandem with the progressive cuts in the number of passenger flights over the course of the month. As a result, the average international freight load factor increased by 6.5 percentage points to 60.3% for the month.
Andrew Herdman, AAPA director general said: “Demand for air cargo remains relatively unaffected, and every effort is being made to ensure that shipments of critical relief supplies including medical equipment, and food products can continue to be transported safely and efficiently around the world.
“Asian airlines account for over one third of global air cargo flows, and operate large numbers of dedicated freighter aircraft. The sharp fall in passenger services has removed significant belly-cargo capacity from the market place. A number of airlines are now operating supplementary cargo services using passenger aircraft to meet the demand.”
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