2JanJJa Q1 2015: insights that may surprise

The last month of Q1 looked like a non-event in air cargo. It barely showed a volume growth (+0.3% worldwide YoY), whilst yield developments (in USD) were in line with what we saw earlier in the quarter, confirming the view that lower oil prices now clearly influence yield levels. But underneath, interesting things happened: pharma ‘exploded’ with a YoY volume growth of 16%, volume & yield ex Japan to North America continued their extraordinary growth, whilst volumes ex China and Hong Kong tumbled by 18% YoY. This last revelation prompted us to take another look at the effects of Chinese New Year (“CNY”).

It is often said that January & February results should be viewed together when judging air cargo performance in Asia. This is only partly true. Determined as it is by the Chinese calendar, CNY falls between January 21 and February 20: this year it was on February 19. Our research shows that the aftermath of CNY, i.e. the gradual start-up of air cargo activities after the date itself, often takes as long as three weeks. Thus, in 2015, the CNY-effects were visible well into March, an added reason to review the total first quarter.

The most striking Q1-figure turned out to be this: taking out the data for China and Hong Kong, the 2015 volume growth worldwide is very stable, viz. around 4% YoY in each of the first three months, resulting in a quarterly growth of 4.2% YoY. However, for China & Hong Kong, often seen as the engines of the world’s air cargo growth, the corresponding figure was 1.8% only. And yet, Asia Pacific as a whole grew by 8%, thanks to striking growth from Japan, Australia, Taiwan, Vietnam and the Philippines, recording YoY growth ranging from 11% in Taiwan to 29% in Vietnam.

The YoY yield drop (in USD) for Q1 was almost 10%. This figure is pretty much the same for 4 of 6 individual areas, the exceptions being Middle East & South Asia (-4%) and Europe (-19%). The latter figure should of course be compared with the yield drop measured in Euros: -1%.  And talking about growth engines: in Q1-2014, 63% of total YoY growth came from five carriers only. In Q1-2015, this figure had gone up to 75%, but only one of the five had kept its place in the elite group of top growers. In other words, shifting panels here as well.

We have not mentioned them for a while, so how did GSA’s fare in Q1?

More than a year ago, we started an intensive research program on GSA’s. Whilst we will invite GSA’s to contribute data for fine-tuning our information, already we assembled data allowing us to compare the performance of individual GSA’s. In Q1-2015 volumes realized through GSA’s amounted to 19% worldwide, ranging from 10-12% (North America and Asia Pacific) via 24% (Africa) to 28-32% (Europe, MESA and Latin America). GSA-yields remained below “own-sales-yields”, but the gap was smaller than a year before: they increased from 87% of own-sales-yields to 90%. The GSA-yields in Africa and Latin America even surpassed those from own sales.