Air freight levels continued to slide in October as fresh figures from IATA released today show cargo traffic nearly 5% down on the same month last year.

Cargo traffic has been in decline since the summer and fell 4.7% in October. While airlines have already reacted to weaker demand by cutting their freighter fleet, capacity in October was still 1.3% higher than the same month in 2010. It means freight load factors are five points down on their early 2010 peak.

"Since mid-year the market has shrunk by almost 5% and this is far greater than the 1% fall in world trade," said IATA director general Tony Tyler. IATA noted that while business confidence has declined considerably in recent months, industry output has not, but that in anticipation of weaker demand there is a shift to cheaper and slower modes of traffic.

Asia-Pacific carriers - accounting for around 40% of global freight markets - are most exposed to freight demand volatility. But IATA said they are still benefitting from the dominance of trade flows to Asia. Carriers from the region recorded the highest freight load factors in October, at 58.8% more than 12 points higher than the industry average.

Overall passenger growth in October slowed to 3.6%. This compares to the 6% growth rate enjoyed over the first 10 months of the year. While international traffic grew at the higher rate of 4.6% in October, this failed to keep pace with the 7% additional capacity on international routes and resulted in a two point drop in passenger load factor.

Despite the eurozone difficulties, European carriers enjoyed above trend demand growth of 6.4%. But Tyler warns: "With Europe accounting for 29% of global air travel, this suggests that the current overall strength in air travel is based on fragile foundations."

Source: Air Transport Intelligence news