Freight tonne kilometres (FTK) in October have seen a year-on-year rise of 5.4 per cent because of improving economic conditions in the US and strong trade in Asia Pacific, according to the International Air Transport Association (IATA) airlines financial monitor.
The region seeing the largest rise in FTK in October was the Middle East, up 13 per cent. Africa saw the next highest rise of 9.6 per cent, followed by Asia Pacific at 6.7 per cent. Latin America was up 4.1 per cent, followed by North America at 3.1 per cent. Europe saw the smallest rise of 1.4 per cent. FTKs for the total market rose by 5.4 per cent in October.
IATA says: “Airfreight volumes continue to expand … supported by improving economic conditions in the US and strong trade growth in Asia Pacific.” It says airlines have also been helped by crude oil prices falling by 36 per cent from the mid-year peak of $122 per barrel.
According to IATA, the jet fuel price was $86 dollars a barrel as of 5 December, which is down 32.9 per cent on one year ago. The drop has been attributed to the strength of the US dollar and growth in supply, particularly in the US. This, the association says, has offset geopolitical threats from other oil producing nations.
Airlines, as a whole, made net post tax profits of $7.1 billion in the third quarter of 2014, down from $7.3 billion during the same period of 2013. This is because of weak cargo revenues and rising costs for Chinese carriers suffering from a weak currency, the yuan renminbi. The third quarter results are an improvement over the first two quarters of 2014. In the first quarter, airlines made a total net post tax loss of $1 billion, and in the second quarter made a net post tax profit of $3.4 billion. During the third quarter, North American airlines made a net post tax profit of $3 billion, compared to $2.8 billion in the same period of 2013.
European airline profits rose to $2.6 billion, up from $2.1 billion in the third quarter of 2013. Airlines in Asia Pacific saw profits fall to $1.3 billion in the third quarter of 2014, down from $2.1 billion in 2013. Latin American airlines saw third quarter profits drop to $20 million from $123 million during the same period of 2013. The freight load factor in October was 47 per cent, up from September when it was 45.5 per cent, but down on the yearly high of March, when it was 48.7.
The load factor was highest in Asia Pacific at 56.6 per cent in October and lowest in Africa at 32.2 per cent. Europe, Latin America and Middle East saw similar load factor percentages of 47.1, 46 and 44.5, respectively. The load factor in North America was 37.6 per cent.