Economic Outlook Q1 2014
Positive cyclical developments in business conditions have helped airline cargo business experience a pick-up in air freight demand, but high jet fuel prices and weakness in yields continue to place downward pressure on financial performance.
World trade in goods and air FTKs
According to the IATA Cargo eChartbook Q1 (pdf), business confidence continues to signal growth in economic activity, despite a moderation in the rate of increase in 2014, and consumers in Europe and the US are becoming increasingly more confident about the economic outlook.
These developments have supported a rise in demand for air freighted commodities like semi-conductors. However, despite a pick-up in world trade growth over recent months, further growth may be limited by the trend toward on shoring of production.
Jet fuel prices have eased slightly in 2014 but remain high, and despite a seasonal pick-up in air freight yields, levels remain down on a year ago, continuing to strain cargo business financial performance. Looking ahead, cargo heads surveyed in January 2014 remain broadly optimistic, expecting traffic growth to increase and yields to remain stable.