Good Start for Air Cargo? Too Early to Tell
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2018 looks to be off to a flying start for the air cargo industry, according to World ACD, but it may be too early to celebrate. Worldwide air cargo yield dropped to USD $1.89 (U.S. dollars) in January 2018, 7.8 percent below December, but 16.8 percent higher than January 2017.
Virtually all airlines posted revenue growth, more than one-third of all reporting airlines achieved volume increases between 10 and 50 percent, and worldwide volume was up by 8.5 percent—with Europe and Latin America up by more than 11 percent.
Yet, it is too early to qualify this year's start, warns the research company. While worldwide USD yield rose by 16.8 percent year over year in January 2018, helped considerably by a devaluing U.S. dollar, the year-over-year yield increase was a mere 1.6 percent in Europe.
Volume trends, however, are difficult to interpret, as Chinese New Year (CNY)—a sizeable influence on overall trade—fell on Jan. 28 in 2017 and on Feb. 16 in 2018. CNY normally has two effects on trade: a spike in trade before, and trade diminishing after. Although the negative influence is usually felt during the two weeks following CNY, the first four days (Jan 28-31 in 2017) bear the brunt of the decrease.
Thus, with world GDP growth continuing, you might expect January to be much better in 2018 than in 2017. But by how much? Based on freight tonne kilometers for the first three weeks of January, World ACD predicts year-over-year volume growth in this "pre-CNY period" may well have been in the four- to six-percent range. Serious growth, yes, but it hints at an overall growth pace lower than the increase shown in the full January figures. February data will better reveal the true start of 2018.