May looking better than April, freighters impacted: WorldACD

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After the extreme Covid-19 impact on air cargo volumes in April, the provisional May results look a bit different and possibly a bit better says data analytics company WorldACD Market Data. It adds that passenger aircraft converted to ‘freighters’ has had an impact on the freighter market.

Worldwide, chargeable weight carried by air, decreased 29 per cent compared with May 2019 year-on-year (YoY). As the final YoY figure for April was a decrease of 34 per cent, the conclusion may be that May showed a slight improvement. The improvement was also visible month-on-month (MoM), as May showed an increase over April of 11 per cent.

In terms of yields/rates, WorldACD says the industry witnessed a completely uncommon 63 per cent MoM-increase in April when a good part of cargo capacity suddenly ‘disappeared’ as passenger aircraft stopped being operated. The MoM-increase in May was 5.0 per cent.

WorldACD MoM

In other words, worldwide yields/rates still went up, from USD 3.74 to USD 3.95, despite additional capacity coming to the market by an increasing number of passenger aircraft being (partly) converted into freighters.

Although this small recovery does not promise a full rebound any time soon, in few markets some guarded optimism may be justified, WorldACD highlights.

The market origin Middle East & South Asia (MESA) suffered most in April (-70 per cent YoY), but came back strongest in May (+45 per cent MoM). The other origin regions showed an MoM increase varying from 4.0 per cent (North America) to 14 per cent (Central & South America).

The origin-Africa showed the largest increase in USD-yields/rates (+13 per cent MoM) while changes in other regions hovered between -10 per cent (Europe and North America) and +12 per cent (Asia Pacific & MESA).

The market from China-East to Germany benefited most from the recent, very drastic market changes: Although it slightly decreased in volume MoM, its YoY increase topped 60 per cent both in April and in May. Its performance for the year-to-date (January–May) was +24 per cent.

Other top markets that performed much better than average in the year-to-date, include Hong Kong–US Pacific (+16 per cent) and China East-US Midwest (+29 per cent). The top markets that suffered most so far this year, were Kenya-Netherlands (-28 per cent) and Germany-China East (-24 per cent).

In the different product categories, the most unexpected development was a 1.0 per cent YoY decrease in pharmaceuticals & temperature-controlled goods, the first such decrease for this category in 2020. The larger perishable categories outperformed the market as a whole in MoM growth: Fruits & Vegetables +16 per cent and Fish & Seafood +26 per cent.

Looking at what happened in May, the most striking features, according to WorldACD, were:

  • The continuous weekly drop of worldwide USD-yields/rates: from USD 4.29 in the first days to an average of USD 3.52 for the last week;
  • The daily pattern recovering from the steady drops shown in April.

WorldACD origin dest may

The much-reported increase in passenger aircraft being transformed into ‘quasi-freighters’ was clearly visible in the strong load factor jump in passenger aircraft (see below). In May, we also noted a drop in the market share of the freighter companies between the first full week of May and the last one, another sign that the conversions started to have some impact.

WorldACD loadfactor changes

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