February 2020: Average market figures shield a starkly different reality from one airline to another
March 25, 2020
In our provisional data for February, published two weeks ago, we mentioned that worldwide air cargo fell by 2.7% year-over-year (YoY) in the first two months of 2020. The more final figures, available now, show a drop of 3%. Note that this figure does not take into account that February had 29 days this year, rendering the YoY figures for that month actually a bit flattering.
With a yield decrease of around 5% YoY, in January/February airlines lost 8% of revenues compared to the start of 2019. In view of the still fragmented bits of news about March, and the dark expectations for the second quarter of 2020, soon this 8% drop will turn out to be a relatively mild result….
Aviation has entered a period of extreme uncertainty about its immediate future. Whilst the overall picture is very bleak, the starting positions of individual parties show large differences. The average 3% YoY decrease mentioned above, hides starkly different individual performances, telling a fascinating story of today’s battlefield.
In Asia Pacific, individual airlines’ YoY performance in the first months of 2020 ranged from -12% to +17% YoY (total for all was -2%). In Europe, where the total for all airlines was -7%, the range was much bigger, going from -36% for one airline to +42% for another. In North America, one airline noted a drop of 20%, whilst another airline grew by 3% (for all, the figure was -7%). In MESA (Middle East & South Asia), the worst performing airline showed a loss of 23% YoY, whilst the best one could boast of a 17% growth (for the total, the figure stood at 0%). Worldwide, full freighter airlines as a group did not outperform airlines with passenger aircraft.
Among the world’s top-30 forwarders, those originating in Asia Pacific jointly lost 9% in YoY volume, with the worst at -17%, but the best at +43%. The Europeans as a group lost 6.5%, with a spread between -23% and +9%. And the North American forwarders as a group lost 5%, the best among them being at the same level as in the first two months of 2019, and the worst at -21%.
Impossible to say whether the performance in 2020 so far is any indication for each party’s fortunes in the months to come. As many airlines reduced their flights to China in February already, capacity constraints led to yields from Europe and North America to China which were not only double the average of the past 12 months, but also higher than the yields in the other direction. Nobody can predict for how long such an unexpected development may last. While we brace ourselves for the short-term impact of COVID-19, we all wonder about the long term impact on supply chains, consumer spending and world trade….
Provisional March data will be available in about two weeks, giving us much more detailed insights in what no doubt will be an upheaval not witnessed before in aviation.
WorldACD has the world's largest air cargo market database. For a large number of markets, WorldACD is the prime source of cargo market information.