The decline in global airfreight markets is accelerating, illustrating further deterioration in worldwide economic conditions, warns the International Air Transport Association (IATA).
In its latest traffic results, the IATA recorded a 3.8 per cent contraction in freight markets in August – more than double the pace of July's 1.8 per cent decline. The total cargo market fell by 1.3 per cent compared to the previous month.
'The industry has shifted gears downwards,' IATA director general and CEO Tony Tyler said in a statement. 'The ... freight business is now shrinking at a faster pace. With business and consumer confidence continuing to slump globally, there is not a lot of optimism for improved conditions any time soon.'
Global freight markets are showing clear signs of decline, the IATA said. During the second half of 2010, weakness in air freight represented a loss of market share to other transport modes. In 2011, air freight reflected the lack of growth in overall world trade volumes. This latest decline shows a further deterioration in global economic conditions.
The IATA said the decline has been most prominent in the largest markets. North American carriers reported a 7 per cent fall in cargo volumes for August compared to the previous year, followed by carriers in Asia-Pacific (down 5.4 per cent), and Europe (down 1.8 per cent).
'Overall, utilisation on freight markets has declined four percentage points since the second quarter of 2010. Coupled with falling volumes, this makes the freight business a very difficult market in which to sustain profitability,' the IATA said in a press release.
Airlines are expected to see total industry profits fall from US$6.9bn in 2011 to US$4.9bn, the group said.
'Airlines are bracing for tough times ahead. Economic uncertainty owing to the European sovereign debt crisis and the growing likelihood of a protracted period of slow growth in developed economies mean the industry will be even more focused on reducing costs and improving efficiency,' Mr Tyler said.
