Robust passenger traffic growth to start the year; air freight volumes inch up with some modest gains

Montréal, 15 March 2016 – Strong traffic growth at the end of 2015 has continued into January 2016, with overall passenger traffic growing by 6.9% compared to the same month last year. The plunge in global oil prices coincided with a rapid fall in global inflation expectations, in addition to a much slower pace of economic growth in China and the rest of the major emerging markets. Nevertheless, when compared to more mature markets, many emerging market economies performed well, thereby stimulating growth in passenger traffic. Chief among these markets is India, with a projected annual GDP growth of over 7.5% for the next five years, and the US, with projected economic growth of 2.8% for 2016. And despite a slowdown in China, it should be noted that the country is expected to maintain economic growth in the realm of 6% over the next five years. Europe’s economic prospects remain largely uncertain, with low projected growth rates of 1.6%, 2.2%, 1.5% and 1.3% for Germany, the United Kingdom, France and Italy respectively.

Regional markets: Passengers

Africa

During the first month of 2016, Africa experienced a decline in total passenger traffic of 3.2%. The two largest passenger markets, South Africa and Egypt, are pulling the regional figure in opposite directions; while South Africa grew by 11.6%, Egypt lost over a quarter of its traffic as compared to January 2015.

Asia-Pacific

Asia-Pacific demonstrated strong total passenger traffic growth in January 2016 at +10.6% year-over-year. The two major markets of China and India showed robust growth of 11.2% and 16.4% respectively. Thailand, Korea, Hong Kong and Singapore also grew by double digits at 14.7%, 12.3%, 13.3% and 10% respectively. The mature markets of Japan and Australia showed lower yet impressive growth of 5.4% and 5.7% respectively. At the individual airport level, notable growth has been recorded at Delhi (DEL, +21%), Shanghai-Pudong (PVG, +20.5%), Seoul-Incheon (ICN, +13.7%), Hong Kong (HKG, +13.3%) and Singapore (SIN, +10%). Jakarta (CGK) is the only major airport in the region posting a traffic decline (-1.8%).

Europe

In Europe the year started with a 5.8% increase in total passenger traffic. While Germany and the United Kingdom grew by 4.6% and 4.7% respectively, major commercial airports in Spain demonstrated stronger growth of 12.4%. Turkey and Italy (+6.5% and +4.5%) were performing better than France (+1.7%), and Russia posted a traffic loss of 3.1%.

A number of airports in the region reported substantial traffic growth, namely Istanbul-Sabiha Gokcen (SAW, +19.3%), Dublin (DUB, +17.1%), Barcelona (BCN, +14.3%), Copenhagen (CPH, +12.9%), Madrid (MAD, +11.7%) and Amsterdam (AMS, +10.4%). Notably, longstanding hubs London-Heathrow (LHR), Paris-Charles de Gaulle (CDG) and Frankfurt (FRA) reported only marginal growth of 1%, 0.4% and 2.2% respectively, while Istanbul-Ataturk (IST) grew modestly by 2.8%. 

With regard to the domestic and international breakdown at the country level, most countries have comparable growth rates in both traffic categories with the exception of Russian airports, where the 20% drop in international traffic as compared to January 2015 has not been offset by a strong growth in domestic traffic (+12.3%). In the United Kingdom, a drop in domestic traffic (-2.1%) was offset by 5% growth in international traffic. In Italy, international traffic grew at 6.5%, with domestic traffic posting growth of just 1.1%.

Latin America-Caribbean

In the Latin America-Caribbean region, total passenger traffic grew by a modest 2.4% during the first month of 2016. At the individual country level, the results are mixed; while Brazil experienced a passenger traffic decline of 7.1% at its major airports, the other two major passenger markets—Mexico and Colombia—grew by 11.4% and 9% respectively. These results are consistent with the trend observed at the end of 2015. The three largest airports in the region—Sao Paulo (GRU, -3.8%), Mexico City (MEX, +10.2%) and Bogota (BOG, +6%)—saw mixed results.

Middle East

Consistent with its performance last year, the Middle East market exhibited high total passenger growth in January 2016 with a solid 9.8% driven by international traffic (+10.4%). The three major aviation hubs—Dubai (DXB), Doha (DOH) and Abu Dhabi (AUH)—reported year-over-year growth rates of 6.3%, 19.2% and 14.1% respectively. Substantial progress was also recorded at Muscat (MCT, +20%), Sharjah (SHJ, +11.2%) and Tel-Aviv (TLV, +7.9%).

North America

North America continues to demonstrate high growth in total passenger traffic (+6%) consistent with last year’s trend. The US is growing faster than Canada (+6.5% versus +2.9%), and international traffic is growing faster than domestic traffic (+6.2% versus +6%). The three largest US airports—Atlanta (ATL), Los Angeles (LAX) and Chicago-O’Hare (ORD)—grew by 6.3%, 9.6% and 7.7% respectively. A number of other airports demonstrated high growth, namely Orlando (MCO, +12.6%), Boston (BOS, +11.1%) and Seattle (SEA, +9.9%).

Regional markets: Air freight

In an environment of continued uncertainty in the global economy and weakened commodity prices, air freight volumes continue to maintain momentum in January with an overall increase of 1.5%.

Most of the regions showed improvements, with the Middle East in the lead (+7.4%), followed by Africa (3.7%), Europe (3.5%) and Asia Pacific (3.3%). On the other hand, freight traffic dropped by 2.8% and 4.7% in North America and Latin America-Caribbean regions respectively.

Africa

In Africa, total freight traffic increased by 3.7%, while domestic freight increased by 3.0% and international freight went up by 2.1%. The three major freight players in the region—Egypt, South Africa and Kenya—showed varying results of +1.2%, +4.8% and -6.6% respectively where total freight is concerned, with Kenya registering a 6.3% decline in international freight. At the individual country level, air freight traffic in Africa is volatile, which stems from the combination of small volumes, turbulence in the commodity markets and a multitude of external shocks.

Asia-Pacific

Total air freight traffic in Asia-Pacific grew by 3.3% during the month of January—the combination of strong 7.9% growth in domestic freight and a 1.5% increase in international freight. The growth in domestic freight is largely attributed to China (+9.7%) and the Philippines (+118.4%). With regard to international freight, strong growth in China (+6.9%) and India (+9.2%) was partially offset by international freight declines in Japan (-1.9%), Chinese Taipei (-5%), Malaysia (-10.5%) and the Philippines (-17.4%).

Eight out of the ten largest freight hubs reported freight volume growth with the exception of Taoyuan (TPE) and Narita (NRT), which stayed in negative territory in January with respective declines of 5.2% and 3.9%.

Europe

In Europe, total air freight grew by 3.5%, whereas domestic freight declined by 2% and international freight increased by 3.9%. While total air freight in Germany grew by a marginal 0.9%, the Netherlands, France and the United Kingdom showed better results (+4.7%, +3.7% and +3.5% respectively).

At the individual airport level, the results for the five largest cargo hubs are mainly positive. While FRA was the only airport that reported a slight decline of -0.3%, CDG, Amsterdam (AMS), LHR and Leipzig (LEJ) posted 4.5%, 4.7%, 2.9% and 5.3% growth respectively.

Latin America-Caribbean

The negative trend in freight traffic continues in the Latin America-Caribbean region with a drop of almost 5% for the month of January 2016 due to Brazil’s struggling economy. The country’s tremendous drop in freight volumes of 19% (which comprises declines in both domestic and international freight of 25% and 14% respectively) far exceeded the gains in the Colombian and Mexican markets (6.2% and 6% respectively). At the individual airport level, the busiest cargo hubs of the region—BOG (+4.9%), MEX (+11.5%) and GRU (-11.9%)—showed varying results. Air freight traffic losses were also recorded in Peru (-1.1%), Puerto Rico (-11.1%), Argentina (-28.7%) and Costa Rica (-10.9%). 

Middle East

In the Middle East, the 7.4% growth in total freight is attributed to the increase in volumes at some of the region’s major airports, which include DXB (+8.2%), TLV (+13.7%), MCT (+18.5%) and DOH (+21.6%). On the other hand, Dubai World Central (DWC) and AUH remained in negative territory in January with drops of 3.4% and 4.2% respectively.

North America

In North America, air freight declined by 2.8% in the month of January as compared to the previous year, which is the result of a significant drop international freight (-8%) and domestic freight being almost flat (+0.8%).

The region’s busiest freight hubs, Memphis (MEM) and Louisville (SDF), witnessed declines in January of 2.5% and 1% respectively. A similar trend can be seen at New York (JFK, -7.1%), ORD (-7%) and LAX (-6.5%), while Miami (MIA) is the only major airport with resilient freight volume at +5.1%. 

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