2Good Q1 2014 - GSA's further on the rise...

The month of March 2014 marked the end of a solid first quarter for the world’s air cargo business. With a year-over-year (YoY) volume growth of nearly 6.7%, accompanied by a USD yield drop (also YoY) limited to 2.6%, the first quarter may have established a nice spring board for the remainder of the year.

Compared to the month of February 2014, March showed strong developments, such as a revenue growth month-over-month of 29%, arrived at through a 25% volume growth and a 3.5% yield growth. Of course, the fact that March has 3 more days than February helped to boost these growth figures, but that does not take anything away from the top growth ex Asia Pacific. Compared to previous years, the jump from February to March was the largest seen for Asia Pacific since we started to track monthly developments, with Europe and the USA standing out as top destinations. This growth was realized particularly by Asian and European airlines. Our first conclusion: the Chinese New Year dip in business becomes bigger every year; that is why February suffered.

Back in September 2013, we said that discussions about outsourcing sales functions usually become more animated when the going gets tough. We added that we would set up research on the position of GSA’s. This has been done meanwhile, and we have decided to make this research an ongoing activity at WorldACD. After all, sales models are changing, and our company’s first aim is to monitor and report developments in all aspects of the commercial side of air cargo worldwide.

The good start of 2014 has not changed the necessity - as perceived by many in the industry - to take a hard look at the way the air cargo business will likely be conducted in the future. Our research shows that GSA’s worldwide are outgrowing the market as a whole. Consequence of the large growth of airlines in markets new to them, or intent to experiment with different “horses for courses”? Passing phenomenon, or the first sign of fundamentally changing sales models? Time will tell. For now, let’s look at some of the latest figures.

Total worldwide volumes in Q1-2014 were 6% higher than two years before; the comparable growth for volumes generated through GSA’s, was 23%. In Europe, the portion of GSA-generated business increased from 24% to 27% of the total business reported to WorldACD for the same periods. From Europe to each of the other regions, business sold through GSA’s grew much faster over the last two years than business not conducted via GSA’s (between 3% and 31%, depending on the destination region). We looked at yields (in EUR) as well, and noted the same pattern from Europe to each of the destination regions: among the top-10 GSA’s for each of the O&D’s, less than half showed a better yield performance year-over-year than was reported for business not generated through GSA’s. But total revenue generated was up for the majority of them.