During October there was, according to the International Air Transport Association (IATA), a small improvement in air freight growth in October. Compared to October 2012, global freight tonne kilometers (FTK) grew 4.0%, with growth in all regions except Africa.

Tony Tyler, IATA’s Director General and CEO, says, “Since mid-year we have seen modest but sustained growth in cargo fed by stronger business confidence and improving trade flows. Air cargo is still a very tough business. Matching capacity to demand has been difficult in an environment where passenger traffic is growing more robustly. There is some evidence that the fall in load factors has stabilized, but yields remain under pressure.”

The average load factor for October was 46.4%, which is an improvement on the year-to-date load factor of 44.8%. This is still several percentage points below 2010 when they peaked at over 50%.

All regions but Africa grew in October 2013 compared to a year ago. The strongest growth was in the Middle East, but Europe also showed healthy improvement. Europe and the Middle East combined have carried three quarters of the cargo increase over the past six months.

African carriers experienced the only decline in October compared to October of last year (-2.7%). Growth in air freight carried by African airlines has seen a slow decline for several months. Although trade volumes for the region continue to increase, competition on important trade routes is strong and lack of adequate infrastructure and political stability continue to hinder growth potential. Weak demand coupled with continued capacity expansion has placed load factors under further pressure, falling 3.5 percentage points compared to a year ago.

Trade Talks Key to Unlocking Growth

Delegates at the World Trade Organization met in Bali to attempt to re-start the Doha round of trade liberalization negotiations. It is crucial that governments make progress to unblock the barriers to global trade. Since the start of the financial crisis, some 500 pieces of protectionist legislation have been enacted round the world, but there is strong evidence that liberalization measures help to increase trade volumes.

Said Tayler, “Governments looking for ‘quick wins’ to facilitate improved trade flows should check that they have ratified the Montreal Convention 99. This treaty provides the legal framework for paperless cargo shipments, dispensing with up to 30 pieces of paper and leading to improvements in efficiency, speed, and cargo security. At present, 88 states have not signed MC99 into law. These include countries in some of the fastest-growing air cargo markets, such as Africa and South-East Asia. At its recent 38th Assembly, International Civil Aviation Organization members passed a resolution urging states that have not yet ratified MC99 to do so. The air cargo industry wholeheartedly supports that resolution and IATA and the International Federation of Freight Forwarders Associations (FIATA) will be in Bali this week to reinforce that message.”