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Air cargo yield declines not as bad for industry as you may

Time:2015-12-01 20:04 Source:Air Cargo News Writer:admin Click:Times

This year’s air cargo yield declines may not have had as much of a negative impact on airlines as many have suggested, according to analyst WorldACD.


The latest market review from the Netherlands-based analyst shows that dollar air cargo yields including surcharges for the first nine months are down by 14% year on year.


While this may initially appear to be bad news for airline’s cargo departments, WorldACD suggested the decline was largely down to lower fuel costs and that with this component stripped out, there wasn’t too much difference compared with 2014.


It added that the volume declines experienced this year were worse for the industry than the yield declines.


“Fuel prices worldwide have come down to less than 50% of what they were mid last year,” WorldACD said.


“The worldwide dollar-yield-including-charges decreased by 14% in 2015 compared with 2014, almost exclusively as a direct consequence of lower fuel charges.


“Thus, the worldwide average price per kg (in dollars & net of surcharge effects) stayed at the same level: in some instances it dropped a bit, in others it slightly rose.


“Coupled with the fact that average prices per kg for all-in shipments remained stable as well, we draw the conclusion that – in terms of market development – the weakness in 2015 has been insufficient volume rather than adverse yield developments.”


It said the increased use of all-in pricing had also affected yield performance. Its figures show that the use of all-in pricing had increased from 11% of total shipments in 2014 to 17% this year.


Looking at the latest demand data, WorldACD said that total chargeable weight grew by 1.8% on last year in October, which was an improvement on the comparable year-on-year figures for the past three months.


“The overall figure was dragged down by the Americas, showing volume drops of 2% in the North and over 10% in Central & South America,” the analyst said.


“All other origin areas showed growth: Asia Pacific 2%, Africa and Europe 4% each, and the Middle East & South Asia 7.5%. Inbound, Africa (-4%) and Central/South America (-12%) suffered.


“The countries growing most formed a “mixed bag”: Australia, Bangladesh and Vietnam continued their strong 2015-performance, Turkey and Norway also did well, whilst small countries such as Myanmar, Lebanon, Djibouti, Algeria and the Balkan countries, all showed very high year-on-year growth.


“No new developments in specific products: pharmaceuticals marched on (+14%), followed by perishables (+5%).”


The worldwide average dollar yield improved month-over-month in October by 1%. However, year on year yields continued their downward spiral, dropping by 17.5%.





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