Airlines’ hopes of Nov-peak-season boost failed to materialise: CLIVE

December 3, 2020: Airlines’ hopes of a peak season boost in November failed to materialise with a year-over-year fall in demand of 1 percent point, registering the first decline in demand since the road to recovery started six months ago, according to CLIVE Data Services and TAC Index.    

Update: 2020-12-03 05:57 GMT
New data for the four weeks ending November 29 shows that capacity %u2013 up 3 percent month-on-month %u2013 outpaced demand, with chargeable weight increasing by just 2.5 percent.

December 3, 2020: Airlines’ hopes of a peak season boost in November failed to materialise with a year-over-year fall in demand of 1 percent point, registering the first decline in demand since the road to recovery started six months ago, according to CLIVE Data Services and TAC Index.

From a low of -37 percent in April, the gap in year-on-year air cargo volumes has been steadily closing in the subsequent months to the end of October, by which time the margin versus 2019 volumes had reduced to -12 percent. In November, however, the gap rose slightly to -13 percent as the coronavirus continued to take its toll on global trade and international supply chains.

New data for the four weeks ending November 29 shows that capacity – up 3 percent month-on-month – outpaced demand, with chargeable weight increasing by just 2.5 percent. Overall, the available capacity was 21 percent less than a year ago. Consequently, despite rising to 72 percent in the opening two weeks of November, the dynamic load factor reduced to 70 percent for the second half of the month which, although 5 percent points higher year-on-year, was still below the 8 percent points load factor increase in the month of October 2020.         

Niall van de Wouw, managing director of CLIVE Data Services, said, “After six months of small but encouraging improvements, the stalling of demand in November – typically a peak month when we’d expect dynamic load factor growth – could be seen as a further negative indicator. However, we must contrast this with the impact of lockdowns and restrictions imposed by governments to slow the second wave of Covid, especially in Europe and the US.    

Airfreight rates
Looking at major trade lanes, TAC Index reports airfreight rates in November increased significantly from Hong Kong and China to Europe month-over-month by 30 and 24 percent respectively, although rates from Hong Kong to both Europe and the United States flattened towards the end of the month and, week-on-week analyses shows China-Europe rates decreasing by around 6 percent towards the end of November.

Robert Frei, business development director at TAC Index, stated, “This is a fluctuating market. The increase in rates is likely to be the result of airlines selling more capacity on the short-term market and forwarders securing air cargo capacity through charter arrangements. Overall, in November, we did not see the rates one would have expected based on earlier anticipation of a strong peak season.”


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