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.
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