In­dia and Europe the bright spots: World ACD

Hard to imag­ine a more dif­fi­cult take-off in 2016 but In­dia’s start may of­fer hope. Europe too was the ex­cep­tion, just as it was in the sec­ond half of last year, with vol­ume growth of more than 5 per cent out­bound.

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Ac­cord­ing to the WorldACD anal­y­sis, the first month of the year in­deed gave lit­tle cause for cheer, year-on-year (YoY) Jan­uary showed a vol­ume in­crease world­wide of no more than 0.3 per cent. Europe was the ex­cep­tion, just as it was in the sec­ond half of last year, with vol­ume growth of more than 5 per cent out­bound and 1.5 per cent in­bound. Although Asia Pa­cific as a re­gion, hardly grew; its busi­ness to and from Europe thrived (+8.8 per cent resp. +10.6 per cent).

Whilst yields nor­mally drop be­tween De­cem­ber and Jan­uary, this year’s MoM de­crease of 6.6 per cent (in USD) was slightly smaller than last year’s. The Jan­uary USDyield drop was 16 per cent YoY, a fig­ure not com­pen­sated for by lower jet fuel prices, even though th­ese prices de­creased by around 30 per cent YoY. Only Cen­tral and South Amer­ica man­aged to gen­er­ate the same yield YoY.

Since an ad­vi­sor to the In­dian govern­ment stated last week that the country ex­pects its air cargo in­dus­try to grow by over 180 per cent in the next 15 years, this is a good mo­ment to see where In­dia stands. Its growth per­cent­ages for the year 2015 are more than dou­ble the world­wide av­er­age: +4.1 per cent out­bound, +4.7 per cent in­bound. And for Jan­uary 2016 the YoY vol­ume growth is even higher: 4.4 per cent and 7 per cent re­spec­tively. With yields (in USD) mov­ing along with the world­wide changes, one could say that it’s start­ing point is good.

The United King­dom is still the most im­por­tant out­bound mar­ket, but its dom­i­nant po­si­tion is dwin­dling. The top in­bound mar­kets of Hong Kong, Ger­many and China East strengthen their po­si­tion with dou­ble digit growth fig­ures: the lat­ter two even man­aged over 20 per cent YoY growth in Jan­uary. Im­por­tantly, there is a good over­all bal­ance be­tween In­dia out­bound and in­bound.

Out­bound busi­ness through GSAs grew in line with the mar­ket in 2015, but in­creased spec­tac­u­larly in the mar­kets to the Mid­dle East and South Asia. The top five GSAs in­creased their mar­ket share (among GSAs) from 60-70 per cent, the top-10 from 80-90 per cent, mak­ing life more dif­fi­cult for the smaller GSAs op­er­at­ing in In­dia.

The same could not be said for In­dia’s top for­warders. Their mar­ket share was al­ready smaller in In­dia than world­wide and it de­creased fur­ther in 2015. Whereas the top five for­warders only lost 0.1 per cent, their share go­ing from 14.6- 14.5 per cent, the five next big­gest for­warders lost a larger part of the mar­ket, as their share went down from 10.5-9.9 per cent. Air­lines could take some con­so­la­tion from the fact that yields re­alised through the top-10 held up bet­ter.

The Jan­uary USD-yield drop was 16% YoY, a fig­ure not com­pen­sated for by lower jet fuel prices, even though th­ese prices de­creased by around 30% YoY

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