Airline heads of cargo remain positive though growth may be peaking

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Airline heads of cargo remain positive about the outlook for the year ahead although cyclical growth may be nearing a peak, IATA reports in its Cargo Chartbook.

The International Air Transport Association (IATA) says annual freight tonne kilometre (FTK) growth accelerated to 11.8 per cent in the three months ending in July while rising yields are helping offset upward pressure on breakeven loads from increased input prices.

The acceleration was driven by a pick-up in contribution from North American airlines, helped by increases in FTKs flown across the Atlantic, while freight traffic is growing 10-15 per cent in all major international markets.

The association says: “Signs suggest that the cyclical upturn in FTK growth may be nearing a peak – not least the fact that the inventory-to-sales ratio has stopped falling. However, business surveys remain consistent with solid annual FTK growth of around 7.5 per cent in Q3 2017.”

817 tonnes of capacity has been added to the freighter fleet so far this year, about half the amount in the same period last year, while 6,203 tonnes of wide-body belly capacity was added, six per cent lower than last year.

Yields including fuel and other surcharges rose 7.9 per cent year-on-year in July 2017, the fastest pace in more than six years.

IATA also comments: “The ongoing upward trend in large freighter utilisation will help to lower unit costs further, and to reinforce the backdrop for financial performance.”