IATA chief says weak cargo remains biggest airline worry

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Weakness in air cargo markets remains the biggest worry for airlines despite some evidence of recovery in 2013, the head of the International Air Transport Association said on Sunday.

“Latest numbers in cargo show that although globally cargo improved a bit, it didn’t really improve in this region (Asia). It’s usually been very strong in this region,” IATA director general Tony Tyler told a news conference.

Air cargo is seen as a barometer for the economy. Experts estimate some 40 percent of world trade by value goes by air.

Led by gains in the Middle East, air freight traffic grew 1.8 percent globally in December compared with the same month of 2013, but it fell 1.1 percent in Asia, according to IATA.

Tyler was speaking at a briefing ahead of the Singapore Airshow.

In December, the Geneva-based airline industry group raised its 2013 and 2014 forecasts for global airline profits due to lower jet fuel costs and improved efficiency.

Earlier this month IATA said that passenger air traffic was strong last year, growing by 5.2% over 2012. Capacity rose 4.8% and load factor averaged 79.5%, up 0.4 percentage points over 2012.

Demand in international markets (5.4%) expanded at a slightly faster rate than domestic travel (4.9%).Strongest overall growth (domestic and international combined) was recorded by carriers in the Middle East (11.4%) followed by Asia-Pacific (7.1%), Latin America (6.3%) and Africa (5.2%). The slowest growth was in the developed markets of North America (2.3%) and Europe (3.8%).
“We saw healthy demand growth in 2013 despite the very difficult economic environment. There was a clear improvement trend over the course of the year which bodes well for 2014. Last year’s demand performance demonstrates the essential and growing role that aviation-enabled connectivity plays in our world. And with system-wide load factors at 79.5% it is also clear that airlines are continuing to drive efficiencies to an ever-higher level,” Tyler said.



African airlines’ demand rose 5.5%, slightly above the global average but below 2012 growth of 7.5%, according to IATA figures. Capacity expansion of 5.2% meant load factor rose 1.9 percentage points to 69%, the lowest among the various world regions. Overall, the demand environment is strong, with robust economic growth of local economies and continued development of internationally trading industries. But some parts of the continent have shown weakness including South Africa, which recently experienced a slowdown in its economy, with a corresponding impact on the demand base for international air travel, IATA said.