iata global cargo update

To represent, lead and serve the airline industry

SAAFF congress: Global cargo update 14th October 2015, Durban Sidy GUEYE, Regional Director Africa – Airport, Passenger, Cargo and Security (APCS)

Key topics

Economic outlook and traffic performance – Surf’s up or down?

Demand environment and drivers – From strength to… ?

Payload - Capacity bloat or crunch?

Revenues, costs and profits – Can lower yields lead to higher profits?

2 IATA Economics www.iata.org/economics

http://www.iata.org/economics

IATA Economics www.iata.org/pax-forecast 3

0%

1%

2%

3%

4%

5%

6%

US Japan Euro Area ASPACexcl

Japan

LatinAmerica

MiddleEast North

Africa

Sub-Saharan

Africa

World

2013 2014 2015

% change over year

Source: EIU Viewswire

Forecast for GDP growth

http://www.iata.org/pax-forecast



Key points

↗ Modest gains in global economic growth expected in 2015 but vulnerabilities in emerging markets present downside risks

↗ On aggregate, the cargo market has shrunk this year compared to the levels achieved at the end of 2014

↗ Inventory overhang in US and a drop in semi-conductor shipments point to weakness in key air freight demand drivers

↗ Reduced freighter aircraft utilization and plunging load factors are other indications of underlying demand weakness

↗ Relative to oil prices, yields have held up but lower load factors and aircraft utilization may compromise profitability





Air cargo modernization

Expectations lower than 2014 projections

Air cargo still supports expansion of the global economy

However time change, markets evolve, regulations change

and customer expectations rise:

Need for the industry to transform in order to stay

relevant and to position itself to seize opportunities while

delivering a safe, secure, robust, profitable and

sustainable industry


Processes and technology modernized very little

in the last decade

Need to catch up to improve cumbersome

procedures

Two pillars: enable e-freight network and removal

of core transportation documents


E-freight: take the paper out of the process and to

replace it with exchange of electronic data and

message

E-AWB: first step towards e-freight

e-AWB penetration rate in AFI: 44.3% (ET, KQ

and SA) – below 2015’s industry target

Penetration rate in SA: 63% (outbound) – 34%

(total)


Launching of e-AWB 360 campaign to boost

penetration rate

The core message of e-AWB 360 is that e-AWB

will become the preferred means for shipping

cargo to all destinations from the e-AWB 360

Airports effective a Go-Live date (march 2016

for JNB)

Objective: 100% outbound JNB airport


FF in SA:

41.5% of FF have joined Multi lateral Agreement (MeA)

66% of MeA FF are doing e-AWB

The Multilateral e-AWB Agreement provides a standard industry

agreement that airlines and freight forwarders can sign once with IATA,

and start doing e-AWB with other parties to the agreement

SA FF encouraged to join MeA

(http://www.iata.org/whatwedo/cargo/e/eawb/Pages/multilateral-forwarders.aspx)

Conduct workshop in 2016 for forwarders who have joined

MeA to help them implement e-AWB

http://www.iata.org/whatwedo/cargo/e/eawb/Pages/multilateral-forwarders.aspx





To represent, lead and serve the airline industry

THANK YOU

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iata global cargo update

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