IATA sees stronger air cargo growth in 2014

GENEVA, March 11 Tue Mar 11, 2014 2:07pm EDT

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GENEVA, March 11 (Reuters) - Air cargo, long stagnant after a big hit during the 2008-09 financial crisis, should see stronger growth this year with demand picking up in most regions, the global airlines body IATA said on Tuesday.

In a review covering the first quarter of 2014, it said positive cyclical developments had brought a pickup in freight demand, especially for commodities like semi-conductors which are mainly shipped by air.

But it gave no specific figures.

IATA, the international Air Transport Association, said cargo heads from its member airlines surveyed in January "remain broadly optimistic, expecting traffic growth to increase and yields to remain stable."

Just last month, IATA director general Tony Tyler said in Singapore that the weak demand for air cargo -- a key indicator of the health of world trade -- remained the biggest worry for international airlines.

But the review said an advance in freight operations was being driven by growing business confidence in an overall economic recovery and climbing consumer confidence, especially in Europe where it was at its highest for three years.

Other drivers were a rebound in U.S. consumer confidence, and stable consumer demand in China.

On the downside, IATA said that although jet fuel prices had fallen slightly this year they still remained high, keeping cargo business yields down on the levels they had reached by March last year.

And, it said, despite a pickup in overall world trade in recent months, further growth could be limited by a growing trend to on-shoring - the switching of production to home base -and protectionist moves in some countries.

(Reported by Robert Evans. Editing by Jane Merriman)

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