Global air freight market rebounds to 3.7% growth in March

The International Air Transport Association (IATA) last week said year on year growth in freight markets rebounded to 3.7% in March from 1.8% achieved in February.

Compared to February, cargo demand expanded by 4.5% whilst global passenger demand fell by 0.3% in March.

IATA said from the second half of 2010 until January 2011, international air freight expanded in tandem with the growth in world trade at an annualized rate of about 10%. This was dented in February 2011 when growth, for a number of factors, fell to 1.8% over the same month in the previous year. The 3.7% year-on-year increase in March reflects more normal trading conditions (outside of Japan and MENA) during the month.

Asia-Pacific carriers, which account for 43% of global freight markets, saw air freight demand contract by 0.6% in March compared to the previous year. This is considerably better than the 5.4% fall in February which was exceptionally depressed due to plant closures associated with the Chinese New Year. Compared to February, freight demand actually improved by 8.2%. Were it not for the earthquake and tsunami in Japan, the rebound would have been much stronger.

Compared to the previous March, cargo traffic carried by European and North American carriers was up 6.1% and 7.1% respectively. Compared to February, European carriers carried 1.8% more cargo, while demand for North American carriers was basically flat at 0.2%.

Middle East and Latin American carriers reported year-on-year freight demand increases in March of 10.1% and 10.4% respectively. African carriers reported the worst performance for March 2011 with a 2.8% fall in demand compared to March 2010.

On passenger IATA said scheduled international traffic results for March 2011 showed that year-on-year growth in passenger demand had slowed to 3.8% from the 5.8% recorded in February.

The impact of the events in Japan on global international traffic was a 1% loss of traffic in March. Looked at regionally, Asia-Pacific carriers saw a traffic loss of over 2%, North American carriers had a 1% drop and Europe’s carriers a 0.5% fall. Japan’s domestic market was the most severely impacted with a 22% fall in demand.

The disruptions in MENA cut international travel by 0.9 percentage points. Egypt and Tunisia experienced traffic levels 10-25% below normal for March. Military action in Libya virtually stopped civil aviation to, from and within that country.

Capacity adjustments lagged behind the sudden drop in demand. Against global demand growth of 3.8%, capacity expanded by 8.6%. The average load factor fell by 3.5 percentage points to 74.6%.

IATA sees 10 airlines joining carbon scheme this year

(Reuters) - Ten airlines are expected to start investing in projects this year that earn carbon credits under a U.N. scheme to help offset emissions, officials said on Friday as Kenya Airways became the first African carrier to enlist.

The International Air Transport Association (IATA) is running a carbon offset programme under the United Nations’ Clean Development Mechanism (CDM), in which firms investing in such projects receive credits called certified emissions reductions.

The global aviation body said there was a push for airlines to have carbon offset programmes because the industry’s rapid expansion is likely to pose a climate change challenge.

“Aviation is a growing market especially in the Asia region. That is why we have specific measures in place to neutralise those increases (in carbon emissions),” Michael Schneider, IATA assistant director for carbon offsets, told Reuters.

“This year we expect 10 airlines to join our carbon offset programme and about five are from Asian countries.”

So far seven airlines under IATA are already funding various projects around the world. The aviation sector contributes about 2 percent of total global carbon emissions.

Kenya Airways said it planned to fund an expansion project in the country’s 48-megawatt Olkaria III geothermal power station in the Rift Valley. The airline has so far offset 100 tonnes during a trial run in April.

Passenger pays voluntarily

The airline, a leading carrier on the African continent, said its passengers could chose to offset carbon emissions of their flights by agreeing to pay a surcharge on tickets.

Kenya Airways said the programme would start with passengers making online bookings. Anyone wishing to forego the programme would be allowed to fly with a normal ticket.

“There is a lot that all of us have done to damage it (the environment) and there is a lot that we can do to make sure we mitigate the damage. It’s not too late,” Titus Naikuni, Kenya Airways’ chief executive, said during the programme’s launch.

The airline said the option will be available for offline bookings at a later date.

IATA’s Schneider said three other African airlines — Mozambique Airlines (LAM), Egyptair and South African Airways were expected to start making payments to carbon offset schemes this year.

“They are in full swing and in the next two months LAM is going to implement its programme and Egyptair will be next in four months. We are in discussions with South African Airways but they have not yet committed,” said Schneider. With only 28 of the more than 1,300 projects registered so far by the U.N., Africa accounts for a little more than two percent of the global CDM market. Analysts say lack of financing was largely behind this.

“Many African countries are often seen as high risk and it’s been harder to raise the finance,” said Tom Morton, executive director at J.P. Morgan, Middle East and Africa Environmental Markets.