Middle East carriers’ freight volumes record slower rise in September

Middle East carriers are not seeing as healthy a pickup in the seasonally-adjusted traffic trend as carriers in other regions, IATA said. (Courtesy Emirates)
Updated 01 November 2017

Middle East carriers’ freight volumes record slower rise in September

DUBAI: Middle East carriers’ freight volumes rose 8.9 percent in September while capacity increased 2.6 percent, but were slower compared with the previous month’s expansion rates, the International Air Transport Association (IATA) said on Wednesday.
“A short-lived weak patch in demand in Q3 2016 has meant that recent months have produced volatility in the year-on-year growth rate,” IATA said, although seasonally-adjusted international freight volumes have continued to trend upwards at a rate of 8 percent over the past six months.
“Still, strong competition, particularly on the Asia-Europe route, means that Middle East carriers are not seeing as healthy a pickup in the seasonally-adjusted traffic trend as carriers in other regions,” the global aviation body said.
Global air freight demand – measured in freight ton kilometers – rose 9.2 percent last month from a year ago, the slowest pace recorded for the past five months but still significantly faster compared with the five-year
average growth rate of 4.4 percent.
Meanwhile, freight capacity – measured in available freight ton kilometers – went up by 3.9 percent in September compared with the same month last year, much slower than the pace of demand growth. This is positive for industry load factors, yields, and financial performance.
“Demand for air cargo grew by 9.2 percent in September. While that’s slower than in previous months, it remains stronger than anything we have seen in recent memory. But there are signs that this demand spurt may have peaked. So it becomes even more important to reinforce the industry’s competitiveness by accelerating the modernization of its many antiquated processes,” Alexandre de Juniac, IATA’s director General and chief executive, said in a statement.
IATA has forecast a 7.5 percent growth in air freight demand for 2017, and noted a “significant upside potential even if the peak of the economic cycle has passed.”
Freight volumes of Asia-Pacific airlines increased by 9.3 percent while capacity expanded 5.3 percent on strong demand to, from and within the region because strong export order books in Taiwan, China and Japan.
North American carriers posted an increase in freight volumes of 7.4 percent for the month, while capacity increased 1.4 percent. In Europe, air freight demand rose 10.3 percent and capacity increased 5.6 percent.
Concerns that the recent strengthening of the euro might have affected the region’s exporters have not materialized, IATA said.
Latin American airlines meanwhile saw demand grow 7.6 percent in September and capacity increase by 5.9 percent. African carriers recorded the largest year-on-year increase in demand of all regions, with freight volumes rising 17.7 percent.
Demand has been boosted by very strong growth on the trade lane to and from Asia, which increased by more than 67 percent in the first eight months of the year, the aviation body said.
However the upward trend in seasonally-adjusted volumes has flattened in recent months, IATA added.


India probes Flipkart, Amazon discounts after retailers complain

Updated 15 October 2019

India probes Flipkart, Amazon discounts after retailers complain

  • Products on Amazon, Flipkart listed at steep discounts in sale
  • Trader groups allege firms violating foreign investment rules

NEW DELHI: The Indian government is looking into whether hefty discounts offered on Walmart-owned Flipkart and Amazon.com during their online festive sales violate foreign investment rules, a commerce ministry official told Reuters.
India introduced new rules in February aimed at protecting the 130 million people dependent on small-scale retail by deterring big online discounts. The rules forced e-commerce firms to tweak their business structures and drew criticism from the United States, straining trade ties between New Delhi and Washington.
While Amazon and Flipkart say they’ve complied with the federal rules, local trader groups say the two companies are violating them by burning money to offer discounts — of more than 50 percent in some cases — during the ongoing festive sales.
Reuters reviewed emails and internal training material from Flipkart showing the company is in some cases offering to reduce, or forfeit, its sales commission from sellers that offer discounts.
The commerce ministry official said the government was reviewing complaints and evidence filed by the Confederation of All India Traders (CAIT), a group representing some 70 million brick-and-mortar retailers, alleging Amazon and Flipkart were violating the foreign investment rules.
The official declined to comment on possible action, but executives from Amazon and Flipkart were summoned to meet commerce ministry officials last week to discuss the matter.
Flipkart in a statement said it had a “good meeting” with government officials and it was “deeply committed to doing business the right way in India.”
Amazon said it had an “open & transparent discussion” with officials and has a high bar for compliance.
Seeking to attract shoppers around the key Hindu festival of Diwali, both retailers have placed full-page advertisements in top national daily the Times of India to showcase discount offerings stretching from Samsung and Apple phones to clothing and diapers.
“Customers are going online because of the unbelievable discounts. Because of this sales at offline businesses are down 30 percent to 40 percent this month,” CAIT’s secretary general Praveen Khandelwal said.
Two emails received by Flipkart sellers in September, just days ahead of the inaugural phase of the festive sales, showed it offering to partly fund discounts.
The company would “burn” 3 percent of the discount if a seller lowered a product price by 15 percent, or 9 percent if the seller discounted by 30 percent, said one of the emails.
In training material posted on Flipkart’s restricted website for its sellers, seen by Reuters, the company asks them to prepare for the festive season by saying “nothing is bigger than this” and explaining how they can benefit by discounting products for Flipkart’s premium customers.
“We want to ensure that you fetch as much profit from it as possible ... whatever the discount you are offering, half of that will be reimbursed to you by Flipkart,” a post said.
A Flipkart source said the incentives were compliant with Indian regulations and were aimed at promoting sellers’ earnings by effectively reducing the commission they pay.
All India Online Vendors Association, whose 3,500 members sell products on various online platforms including Flipkart, in a statement said fewer than 100 of its members benefitted from Flipkart’s partial discount funding, giving some sellers an unfair advantage.