Weak trade activity pulls down air cargo demand in Asia Pacific in March
AIR cargo markets contracted for the fifth month in a row, with air cargo demand measured in freight tonne kilometres (FTK) falling by 3
AIR cargo markets contracted for the fifth month in a row, with air cargo demand measured in freight tonne kilometres (FTK) falling by 3.2 per cent in March compared to the same month last year, according to traffic figures released by the Association of Asia Pacific Airlines (PA).
The March decline was attributed to ongoing weakness in demand for intermediate goods and a corresponding fall in new business orders affecting air cargo shipments, reported London's Air Cargo News.
Offered freight capacity rose by 1.1 per cent, resulting in a 2.8 percentage point decrease in the average international freight load factor to 62.4 per cent for the month.
Commenting on the results, PA director general Andrew Herdman said air cargo demand fell by 5.6 per cent during the first quarter, 'reflecting cautious market sentiment linked to unresolved trade tensions, particularly between the US and China'.
Mr Herdman said: 'Prospects for air travel markets remain positive, on expectations of continued moderate growth in the global economy. The ongoing shift towards air cargo for e-commerce shipments of consumer goods should provide some level of support to air cargo demand, although prevailing conditions remain weak.
'Having faced increasing headwinds to operating conditions, many of the region's carriers saw a deterioration in earnings performance last year. Higher fuel and labour costs led to a squeeze in margins, despite continued growth in demand and some improvements to airline yields.
'Overall, Asia Pacific carriers continue to respond to an intensely competitive marketplace, actively implementing strategic initiatives and pursuing avenues for growth to sustain profitability.'