Air freight growth has improved from a year ago, but high jet fuel prices and weakness in yields continue to hamper financial performance.
Consumers in Europe and the US are becoming more confident, which has supported growth in demand for air-freighted commodities. However, recent developments in the demand environment suggest growth could weaken in the months ahead.
Business confidence has flattened, and world trade volumes have started to decline. Moreover, growth in world trade may be limited by the trend toward on-shoring of production.
Jet fuel prices have been stable, but remain high at about $120/bb, and yields are down on a year ago, straining financial performance.
As new aircraft deliveries come into service in 2014, there could be further downward pressure on yields. Cargo heads surveyed in April expect yields to remain stable during the year ahead, and while they anticipate volumes to increase, rates of growth have been downgraded compared to the January survey.
WHAT TO TAKE AWAY FROM THIS ARTICLE:
- Cargo heads surveyed in April expect yields to remain stable during the year ahead, and while they anticipate volumes to increase, rates of growth have been downgraded compared to the January survey.
- Jet fuel prices have been stable, but remain high at about $120/bb, and yields are down on a year ago, straining financial performance.
- Air freight growth has improved from a year ago, but high jet fuel prices and weakness in yields continue to hamper financial performance.
