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Air cargo upturn – will it last?

GENEVA: April 06, 2017. IATA reports a 12 percent rise in freight tonne-kilometers in February compared to the same month last year - almost four times its five-year average rate of 3.0 percent.

Asia Pacific and European airlines accounted for 75 percent of the increase while Latin American carriers put a dent in the results for the 25th time in 27 months, according to IATA.

The association said the current strong FTK growth rate "ties in with growing signs of a recovery in world trade conditions" as the new export orders component of the global purchasing managers' index (PMI) remains close to a six-year high. "At current levels, the PMI measure is consistent with ongoing solid FTK growth in H1 2017," it concluded.

Swiss World Cargo"February further added to the cautious optimism building in air cargo markets," commented IATA director general and CEO Alexandre de Juniac. "With demand growing faster than capacity, yields got a boost. While there are signs of stronger world trade, concerns over the current protectionist rhetoric are still very real," he added.

The IATA results are echoed by analysts WorldACD who said the start of 2017 "has been promising" with year-on-year growth of 6.3 percent in kilograms carried and 7.4 percent in 'Direct Ton Kilometers', the measure combining weight with the geographical distance between origin and destination of shipments.

The company said while the signs might "harbinger good times to come" with air cargo riding the wave of an improving world economy, it cautioned against expecting the current growth levels to continue. "After all, the impressive growth percentages of the past half year were possible because of the relative weakness in the equivalent period one year earlier." 

Meanwhile de Juniac noted: "Any optimistic look at the future sees growing demand for specialized value added services. Shippers are telling us that the key to turning the current uptick in the cargo industry's fortunes into longer-term growth is modernizing our antiquated processes."

In a related air cargo announcement, Swiss WorldCargo has restructured its business into three components: Business Development & Customer Experience, Area & Contribution Management, and Quality & Services.

"The new organizational structure of Swiss WorldCargo is designed to make it more agile and to put our customers in the centre of all our activities," explained Ashwin Bhat, head of Cargo, Swiss International Air Lines. "In a people business like air cargo, it is extremely important that these services are supported by a well-structured organization and delivered by skilled professionals who can play to their individual strengths."

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