Air freight growth continues to grow modestly in May, up 4.2 per cent

Freight capacity, measured in available freight tonne kilometres (AFTKs), grew by 6.2 per cent year-on-year in May 2018. This was the fourth month in a row that capacity growth outstripped demand growth.
Freight capacity, measured in available freight tonne kilometres (AFTKs), grew by 6.2 per cent year-on-year in May 2018. This was the fourth month in a row that capacity growth outstripped demand growth.

The International Air Transport Association (IATA) has released data for global air freight markets showing that demand measured in freight tonne kilometres (FTKs), rose 4.2 per cent in May 2018, compared to the same period last year.

This was slightly down from the 5.2 per cent (revised from 4.1 per cent) growth in annual demand recorded in April 2018.

Freight capacity, measured in available freight tonne kilometres (AFTKs), grew by 6.2 per cent year-on-year in May 2018. This was the fourth month in a row that capacity growth outstripped demand growth.

After a weak start to 2018, demand for global air freight has now resumed a modest trend upwards. However, the rapid growth seen in 2017 is now over, with demand growing at a significantly slower pace in 2018.

In IATA’s mid-year industry outlook, 2018 freight growth was revised downwards to 4 per cent (from the previously forecasted 4.5 per cent in December 2017).

“We expect air cargo demand to grow by a modest 4 per cent in 2018. That’s an uptick from a very weak start to the year. But headwinds are strengthening with growing friction among governments on trade,” said Alexandre de Juniac, IATA’s director general and chief executive officer.  

“We still expect demand to grow, but those expectations are dampened with each new tariff introduced. Experience tells us that trade wars, in the long run, only produce losers.”

All regions except Africa reported an increase in growth in May 2018.

Asia-Pacific airlines saw freight demand increase in May 2018 to grow 4.9 per cent compared to the same period last year. This was an increase over the 3.9 per cent recorded the previous month. Capacity increased by 7.4 per cent. As the largest freight-flying region, carrying close to 37 per cent of global air freight, the risks from protectionist measures impacting the region are disproportionately high. That said, there are signs that demand is accelerating for international FTK’s.

North American airlines’ freight volumes expanded 5.9 per cent in April 2018 compared to the same period a year earlier. This was an increase in demand from the 4.6 per cent rate of growth recorded the previous month. Capacity increased by 5.4 per cent. The recent momentum of the US economy and the US dollar has helped strengthen demand for air imports. Data from the US Census Bureau shows a 12 per cent  year-on-year increase in imports by air in April, compared to 2.4 per cent growth in March.  

European airlines posted a 2.3 per cent increase in freight volumes in May 2018. This was a slowdown from the 3.5 per cent rate of growth the previous month. Capacity increased 6 per cent. Seasonally-adjusted volumes rose slightly over the past two months; however, the annualized rate of growth over the past six months remains low at only 1.5 per cent.

Middle Eastern carriers’ freight volumes grew 2.4 per cent in May 2018. This was a significant deceleration in demand of over 6.9 per cent the previous month. The decrease mainly reflects developments from a year ago rather than a substantive change in the current freight trend. Seasonally-adjusted freight volumes continue to trend upwards at a comparatively modest pace by the region’s standards. This is consistent with signs of a broader moderation in global trade. Capacity increased 3.3 per cent.

Latin American airlines experienced growth in demand of 11.4 per cent in May 2018 – the largest increase of any region for the third consecutive month. Capacity increased by 1.5 per cent. The pick-up in demand over the last 18 months comes alongside signs of economic recovery in the region’s largest economy, Brazil. Seasonally-adjusted international freight volumes surpassed the May 2014 peak this month.  

African carriers saw freight demand contract 2 per cent in May 2018 compared to the same month last year. Capacity increased by 20.4 per cent. After a surge in international FTK volumes last year, seasonally-adjusted international freight volumes have now trended downwards at an annualized pace of 15 per cent over the past six months. This mainly reflects a softening in demand on markets to/from Asia and the Middle East.

Be the first to comment

Leave a Reply

Your email address will not be published.


*