HOPES OF AIR RECOVERY PREMATURE
Air freight volumes for May were higher than in April, but dips in the final two weeks may be an indicator of more challenging times ahead, as airlines return capacity to the market.
Data reports volume in the first two weeks of May grew by 3.6% and 5%, respectively, but fell in weeks three and four by 1.9% and 5.1%, as capacity growth was higher than volume growth, reducing the dynamic load factor for the first time in weeks by 0.5%.
This easing of pressure on capacity had a softening impact on freight rates on major trade lanes.
Analysts suggest that the industry has passed the (initial) bottom. After reporting a 37% decline in volumes, year on year, in April, the corresponding figure for May of -31% “shows a slight upward curve and, measured alongside a capacity decline of -42% versus last year, the pressure on capacity remains high.
Looking at the last 12 weeks, it is clear to see that market volumes remain erratic and that this will continue for the foreseeable future.
There is little indication that the increase in capacity is being met by growth in demand and, with increases in passenger schedules, global air freight rates will remain under pressure as capacity returns to the market.
