The International Air Transport Association (IATA) released full-year air cargo data for 2014 showing 4.5 per cent demand growth compared to 2013 measured by freight tonne kilometres (FTKs), marking a “significant acceleration” from the 1.4 per cent recorded in 2013 over 2012.

IATA said the air cargo market expansion gathered momentum as 2014 progressed with the year finishing on a positive note as growth in December accelerated to 4.9 per cent, compared to December 2013.

The vast majority of the growth in 2014 was in the Asia-Pacific and Middle East regions, which respectively contributed 46 and 29 per cent respectively, of the expansion in FTKs. Growth was recorded in all other regions, but was particularly weak in Latin America.

“After several years of stagnation, the air cargo business is growing again. This is largely being driven by the uptick in world trade over the second half of 2014, said Tony Tyler, IATA’s director general and CEO. “Recent concerns over the health of the global economy and a corresponding fall in business confidence have not yet impacted air cargo. But it is a downside risk that will need to be watched carefully as we move through 2015.”

Performance varied widely by region with the most significant growth being recorded by carriers in  Middle East which saw an expansion of 11.3 per cent in December and 11 per cent for the year as a whole. Airlines in the region have extended their networks and grown capacity by 11.1 per cent to make the Middle East a hub for freight traffic. Carries in the Middle East region have been responsible for over 37 per cent of the total increase in global freight capacity in 2014, IATA added.

Asia-Pacific carriers grew 5.9 per cent in December compared to December 2013 and 5.4 per cent for 2014 as a whole. Volumes have benefitted from increasing import demand in addition to continuing manufacturing strength. Japanese and Chinese markets were particularly important contributors. Overall in 2014, capacity expanded 5.7 per cent leading to a slight fall in load factor to 55.4 per cent, although this remains the strongest load factor of any region, IATA noted.

North American airlines reported demand growth of 2.8 per cent in December and 2.4 per cent for 2014 as a whole. After a slow, weather-affected start to the year, growth accelerated, driven by import and export demand. Carriers in the region cut back capacity in 2014 by 0.5 per cent, helping to underpin an average load factor of 35.3 per cent.

European airlines saw FTKs expand 2.3 per cent in December and by two per cent in 2014 overall. The Eurozone remains weak and close to recession, with the effects of Russian sanctions also having an impact. Load factors also fell in 2014 as capacity expanded three per cent.

Latin American airlines reported FTKs falling 4.5 per cent in December making this the only region to report a decline. The picture for 2014 as a whole was growth of 0.1 per cent. Latin American volumes have been affected by economic slowdown across the region, particularly in Brazil and Argentina. Capacity grew marginally by 0.3 per cent in 2014.

African carriers expanded FTKs by 12.2 per cent in December and 6.7 per cent for the year as a whole. Although major economies Nigeria and South Africa underperformed during parts of 2014, regional trade activity held-up, supporting demand for air transport of goods. Capacity rose just 0.9 per cent for the year as a whole, helping to strengthen the load factor.

“Despite the improving growth trend, big challenges remain,” said Tyler. “Yields declined for the third straight year in 2014, with no immediate prospect of improvement. Cargo revenues remained basically unchanged at $62 billion, some $5 billion below their 2011 peak. To move forward, the industry is focusing on providing a stronger value proposition to meet evolving customer needs. That’s what is driving efforts such as cutting shipping times, ensuring high-quality handling of temperature-sensitive goods, or benchmarking quality to improve customer transparency. It’s all about delivering value as a supply chain with a strong vision of the future.”