Geneva - The International Air Transport Association (IATA) released data for global air freight markets showing a 3.2% expansion in freight tonne kilometers (FTKs) in January 2015 compared to the same month last year. The growth is slower than the average of 4.5% recorded for 2014.
There was much regional variation in the January performance. Asia-Pacific, African and Middle Eastern airlines expanded strongly, but airlines in Europe and North and Latin America all reported demand contractions. Although it is too early to be certain of a trend towards weaker air freight, there are at least two emerging factors which could negatively impact demand for air cargo in the coming months:
Business confidence has been declining since mid-2014 and export orders tailed-off towards the end of the year
A reversal of the positive trade-to-domestic production ratio which boosted cargo volumes last year
"January was a disappointing start to the year for air cargo. And it is difficult to be too optimistic about the rest of the year given the economic headwinds in Europe and growing concerns over the Chinese economy. Add to that the continuing trends of on-shoring production and trade protectionism and 2015 is shaping up to be another tough year for air cargo," said Tony Tyler, IATA's Director General and CEO.
Regional analysis in detail
Asia-Pacific carriers grew their FTKs 6.9% compared to January 2014, supported by an improvement in regional import activity. Japan's expansion is helping regional volumes, but there could be concerns over the Chinese economy, which saw export orders contracting at the fastest pace in three years. Capacity rose 5.4%.
European airlines saw volumes fall 1.2% compared to a year ago. The Eurozone is facing deflationary economic headwinds and the weakness of the Russian economy is also impacting demand. Weak home demand is not being offset by North Atlantic and Asian growth opportunities. Capacity grew 3.6%, further weakening the load factor.
North American carriers experienced a 1.0% fall in FTKs. This decrease, however, is most likely due to the strong result that occurred in January 2014. Underlying trends for North American volumes are positive. Trade is growing and the month-to-month comparison of FTKs shows expansion in January compared to December. Capacity fell 2.8%, continuing the recent trend of improving load factor.
Middle Eastern carriers expanded FTKs 9.2%. The hub strategies of the leading airlines in the region are proving successful as network and capacity expansions help satisfy demand on international routes and serve inward trade to Middle Eastern economies. Capacity jumped 18.1%.
Latin American airlines suffered a 6.4% fall in FTKs compared to January 2014. The region continues to be affected by the weakness in the key economies of Brazil and Argentina. Although other Latin American markets have increased regional trade in recent months, this has not yet translated into increased air freight demand. Capacity fell 2.0%.
African airlines grew cargo volumes 5.2%. While major economies such as Nigeria and South Africa are under-performing, regional trade activity is holding up. Capacity rose just 2.4%, strengthening the load factor.
World Cargo Symposium
The World Cargo Symposium will gather leaders from across the cargo value chain in Shanghai, China, from 10-12 March. "The global air cargo industry continues to face challenges. While vulnerability to the economic cycles is beyond the control of any business sector, it is clear that the air cargo industry needs to do a better job of improving its value proposition. Shippers rightly demand modern processes. Taking e-air waybill penetration above 22% in 2014 was a strong signal that the e-cargo revolution is finally taking shape. This year's World Cargo Symposium is an opportunity for the entire industry to sharpen further its focus on innovation, efficiency and high-quality service," said Tyler.
Posted by: just4airlines.com at 0937h UTC Mar 03, 2015
DUBAI, U.A.E. - Emirates, a global connector of people, places and economies, and Frontier Economics, a leading European consultancy, released today the results of a socio-economic impact study that measures Emirates' contribution to the European economy.
Frontier estimates that Emirates' operations, including the catalytic impact of the 220 unique connections it offers, supported 85,100 jobs across the EU in 2013/14, equivalent to €6.8 billion GDP of the total EU GDP. In addition, Emirates' Airbus A380 deliveries for the same period supported 41,000 jobs, equivalent to €3.4 billion GDP.
"Emirates is fully committed to the European market. The relationship goes back to 1987 when we first started flying from Dubai to London Gatwick. Since then, we have witnessed growth based on demand and now operate over 350 passenger flights a week from Europe, providing global connectivity via our hub in Dubai," commented Sir Tim Clark, President of Emirates Airline. "Emirates' economic impact is significant; based on Frontier's report, we supported over one hundred thousand jobs across Europe through our operations and our aircraft purchases from Airbus. By stimulating demand for travel and cargo, especially in markets underserved by other airlines, Emirates contributes to the economies of the communities we serve."
The study conducted by Frontier demonstrates that Emirates' presence in 28 European cities significantly contributes to regional development, especially in non-hub markets that have traditionally been overlooked by other carriers.
"Some of Emirates' competitors have in the past accused the airline of having a negative impact on Europe, but the Frontier analysis paints a different picture. Our research shows that the direct, indirect and induced impact of Emirates' operations and the development of connectivity to secondary cities in particular, makes a substantial contribution to EU GDP", stated Dan Elliott, founder and Director of Frontier Economics. "The economic value this connectivity brings to the EU is at times underappreciated, and something that merits attention."
The Value of Connectivity
Traditionally, international travel from Europe involved flying from or often backtracking to one of the big European hubs. This contributed to a connectivity gap for other major European cities, restricting their ability to develop trade and Foreign Direct Investments (FDI) opportunities. Since launching services to Europe in 1987, Emirates has helped bridge this gap, by gradually and on the basis of demand, increasing services to major and secondary cities across Europe.
The Frontier analysis, which covered 28 cities served by Emirates in 16 EU Member States, identified a total of 220 routes from Europe that are unique to Emirates. 21 of these are non-stop connections from European cities to Dubai, and the remaining 199 routes are unique one-stop connections, via Dubai. Using any other airline or alliance on these unique routes would require at least one more additional stop.
"The connectivity Emirates provides through these 220 unique routes positively impacts FDI and trade and supports the development of regional centres. It also increases tourism, provides choice for the consumer and supports air cargo shipments to and from regional centres", commented Dan Elliott. "We estimate that an additional 3,000 jobs are facilitated through the catalytic impact of the 220 unique connections, equivalent to €215m of GDP, taking Emirates' total contribution to €6.8 billion."
Considering the breadth of Emirates' network and how air travel demand is expected to double in the next 5-10 years, Emirates is well positioned to bring a growing number of tourists and business travellers to Europe, further enabling trade and investment.
With a total of 140 aircraft ordered, Emirates is the largest purchaser of Airbus' A380, accounting for more than 40% of the total A380 order book. In 2013 Airbus delivered 13 A380s to Emirates which represented 50% of the total A380 deliveries that year. Whilst Emirates has been operating A380s for 6 years, after placing the original order more than 13 years ago, the employment generation in Frontier's analysis is only calculated for 2013. These numbers can be projected for the duration of the delivery schedule.
Airbus estimates that Emirates' A380 orders support the employment of 41,000 direct, indirect and induced jobs in Europe. About 70% of these jobs are split equally between France and Germany, with the UK having 17% and the remaining 5,000 jobs in Spain. These are high-skilled jobs and impact a high-value supply chain, creating a significant multiplier effect in countries where Airbus has aircraft production facilities.
*Including Emirates' operations and the catalytic impact of the 220 unique connections it offers.
Posted by: just4airlines.com at 0840h UTC Mar 03, 2015
CALGARY /CNW/ - WestJet announced today that Brand Finance, one of the world's leading brand valuation consultancies, has once again ranked WestJet in the top 100 Canadian brands with a valuation of $629 million USD as of January 1, 2015. The airline's enterprise value, which is the combined market value of the equity and debt of a business less cash and cash equivalents, is pegged at more than $3 billion USD. Today's announcement moves WestJet seven spots up the ranking from last year to 67.
"We are pleased to see we are once again ranked as one of Canada's most-valued brands," said Bob Cummings, WestJet Executive Vice-President, Sales, Marketing and Guest Experience. "A strong brand value translates into benefits for our guests, our shareholders and our WestJetters. With respect to our guests, a strong brand means our strong fundamentals -- based on our cost structure and our people -- delivers superior value for price paid. Shareholders, who've watched the price of WestJet shares more than double since January 1, 2011, have also seen outstanding value. Finally, for WestJetters, there is enormous pride in working for an enviable brand and a company that is in a strong position to introduce new products and grow into new markets. I would like to thank our more than 10,000 committed and dedicated WestJetters, as well as our loyal guests who have supported us for the past 19 years."
Brand Finance calculates brand value by determining the royalties a corporation would have to pay to license its brand if it did not own it. Similar to a credit rating, brands are also assigned a rating from AAA+ to D according to strength, risk and potential of a brand relative to its competitors. Brand Finance is a London, England-based brand valuation consultancy, with offices in more than 15 countries.
Posted by: just4airlines.com at 0118h UTC Mar 03, 2015
CALGARY /CNW/ - Canada's most-preferred airline will mark its 19th birthday with a special one-day seat sale today featuring great fares on more than 5,000 seats to some of its most-popular destinations, including Las Vegas, Hawaii, Dublin, Ireland, Glasgow, Scotland, Montego Bay, Cancun and select Canadian cities.
"WestJet is Canada's low-fare leader and today, as we approach two decades of service to Canadians, we want to celebrate with a very special birthday seat sale," said Bob Cummings, WestJet's Executive Vice-President, Sales, Marketing and Guest Experience. "This sale, which features total fares starting from $61.03, including a base fare of just $19, marks our 19th anniversary. It's fitting that we offer our guests some of the best fares in our history to show our appreciation for their loyalty and support over the years."
The sale is based on availability and ends today at 11:59 p.m. mountain time.
Posted by: just4airlines.com at 0117h UTC Mar 03, 2015