Cargo load factors fell further in May compared to April to an overall 44.3 per cent from 45.1 per cent a year earlier, with Asia Pacific registering the highest load factors at 53.3 per cent, followed by Europe (44.6 per cent), Middle East (43.2 per cent), Latin America (36.7 per cent) and North America (35.3 per cent).
Although there was only a small increase in capacity (0.7 per cent) over the month, there was a sizeable fall in volumes, which pushed load factors down further. Air freight load factors are the lowest they have been since mid-2009, on a seasonally adjusted basis. May 2015 saw a 2.1 per cent growth in freight tonne kilometres compared to four per cent last year.
On the other hand, Airline financial performance is improving strongly according to the International Air Transport Association’s (IATA) Q1 financial results. A sample of 81 airlines shows that the industry financial performance improved significantly on the year ago period at the operating and net profit level. The increase was driven by North American airlines, where consolidation and cost cutting has resulted in a significant boost to profitability and lower fuel costs. Asia Pacific airlines have also improved on a year ago. Chinese carriers have recorded solid Q1 2015 profit results, owing to strong demand and improved operational efficiency.
Crude oil prices had fallen below US$50/bbl in January, the lowest price seen for the past six years. Since then, there have been two small rallies; the most recent was a 15 per cent increase in May compared with the prior low in March. In June however, there was another decline in crude oil prices, falling five per cent compared to May. The recent weakness reflects expectations of supply increases from Iran and the US. Jet fuel prices fell by nine per cent over the same period.