IATA's monthly compilation of air freight transport traffic came out a week late, yesterday. Still, what it told us was that by February, air freight was genuinely booming. In terms of cargo tonne kilometers, international air freight rose 10.4% yoy. This was not just a base effect from covid, it was also up 9.6% from February 2019. Of the largest markets, N America was up 23%yoy, Europe was up 10.5% and Asia Pacific (which had been hit less badly by covid last year) was up 8.2%. In terms of gains over February 2019, N America was up 17.6%, Asia Paci was up 29.2% and Europe was up 22%.
These are genuine boom numbers. Why is it happening? Well first, of course, its a reflection of surging global exports: remember, NE Asia's exports were up 33.9% yoy in February in dollar terms, and were up 32.4% from Feb 2019. But there's more: globally supplier delivery times are stretched to near-record levels, so there's a race to secure supplies and to build inventory. Typically, air cargo picks market share from marine up when there's an inventory-rush, and that's happening now. The fact that Suez Canal got blocked for days recently means this pressure will only have built in March.
But that's not all either. Covid has dramatically cut the number of passenger planes in the air, which in turn means that all that belly cargo capacity has also been taken out of the equation. In fact, international air cargo capacity - that's air freighters and belly cargo combined - was down 13.7% yoy.
So a rush of demand is having to be met by a smaller supply capacity. The result is . . . well, here I'm going to quote the IATA bulletin: 'the industry-wide cargo load factor reached a record high outcome for any month of February in the history of our time series, at 57.5%. At the regional level, Asia Pacific carriers continued to report the highest load factors (69.2%), followed by European carriers (64.1%).
Moral: airlines are going bust because of Covid, but air freighter asset turns and ROC must be booming.
