Global cargo markets are expected to finish 2012 0.4-percent behind 2011 levels, according to International Air Transport Association projections. Increased airfreight capacity amid sluggish trade volumes has led to IATA’s more “pessimistic” projections regarding cargo yields; the association anticipates airfreight yields lagging 2-percent behind 2011 levels. These figures are below previous IATA projections.
Earlier this year, IATA anticipated a 0.3-percent, year-over-year, surge in cargo traffic for the full year and flat cargo yields. In a press release, IATA attributed the latter downgrade to worldwide discrepancies between supply and demand.
Cargo capacity in the first eight months of 2012 was 3-percent higher than demand, a problem directly tied to belly-hold operations. Since roughly half of all airfreight is carried in the bellies of passenger craft, matching cargo capacity to demand is difficult, according to the press release.
Such problems will likely plague airfreight markets in 2013. According to association projections, cargo markets will see yields drop by 1.5 percent in 2013, despite a resurgence in world trade. Global trade levels are projected to swell 5.1-percent, year-over-year, in 2013, ahead of the 3.4-percent, year-over-year, increase projected for 2012.
Overall, however, IATA revised upward its global aviation outlook for 2012. IATA projects that airlines will earn $4.1 billion in 2012, $1.1 billion more than the association predicted in June. The association also projects global profits increasing to $7.5 billion in 2013, although the net margin is only 1.1 percent.
Tony Tyler, IATA director general and CEO, explained the rationale behind these projections. “The European sovereign debt crisis lingers on,” he said in a statement. “China continues to moderate its growth. And the impact of recent quantitative easing in Japan and the U.S. will take time to yield growth. While some of these risks have diminished slightly over recent months, they continue to take their toll on business confidence. The outlook improvement is due to airlines performing better in a difficult environment.”