The International Air Transport Association (IATA) has reported that total air cargo volume further declined in September with escalating trade tensions, geopolitical and economic risks, as well as weak new export orders.

IATA said growth in industry-wide freight tonne kilometres (FTKs) remained negative that month, recording a 4.5% year-on-year drop, following a 4.2% decline in August.

In seasonally adjusted terms, the association of the world’s airlines said the level of FTKs was up slightly on a month-on-month basis, "continuing the broadly sideways trend" in freight volumes in March.

Uncertainty, trade dispute dragged airfreight volumes

Airfreight capacity also continued to grow modestly in September, posting a 2.1% increase, although airlines have reduced the rate of capacity growth in response to weaker demand conditions, capacity continues to outgrow demand, it added.

"The global backdrop for air freight is still one of uncertainty and, at best, only weakly supportive forward indicators. September saw another escalation in the trade dispute between the US and China ... South Korea and Japan also imposed stricter trade controls on each other in August-September," IATA said

Falling freight volumes were observed across all regions, except for Africa, the only region to have recorded year-on-year growth in the past four months.

Middle East, Asia Pacific airlines hardest hit

Middle Eastern airlines saw freight volumes decrease 8% in September, the sharpest drop in freight demand of any region. IATA said this was triggered by escalating trade tensions and the global linkages in supply chains, most of the key routes to and from the Middle East have seen a weak performance in the past few months.

"This is the weakest outcome since the Global Financial Crisis and the sixth consecutive month of falling year-on-year volumes," IATA said.

North American airlines saw demand decrease by 4.2% in September  – improving from the 4.9% drop in August  – but IATA said cargo volumes in this large market clearly remain weak.

IATA's report showed that in Asia Pacific  – the largest region for air freight volumes –demand for air freight also contracted by 5.9% in September 2019 year-on-year, and further dropped from the 5% seen in August. 

"This key global manufacturing and distribution hub has borne the brunt of the weakness in trade and air freight volumes over the past year or so. Asia Pacific was the first region to post a year-on-year decline in FTKs, dating back to November 2018," it said.

It added that the disruption to airline operations at the Hong Kong International Airport   – the largest cargo hub in the world  – has also created additional challenges for the industry in the region.

The region accounting for more than 35% of total FTKs.

Meanwhile, European and Latin American airlines both recorded a 3.1% drop in volumes for September from declining 3.3% and 2.9% respectively amid ongoing uncertainties in both regions.

In Europe, IATA said despite weakness seen in several key economies including Germany and the UK as well as the ongoing uncertainty around Brexit, seasonally adjusted FTKs in the region "appear to have stopped falling, and have trended broadly sideways since the first quarter."

Volume recovery expected in 2020

In Latin America, it said despite recent indications of recovery in the Brazilian economy, deteriorating conditions elsewhere in the region along with the difficult global business backdrop have all contributed to the region’s air cargo volumes easing.

 IATA noted, however, that despite the slump observed, the scenario looks better in 2020.

"Notwithstanding the ongoing weakness in the year-on-year growth outcome, removing the regular seasonal volatility in the monthly data gives a different perspective to recent developments. It clearly illustrates the fact that most of the decline in air freight volumes occurred in late 2018 and early 2019, with the downward trend having plateaued since that time," it said.

"If the current trend is continued in the monthly outcomes, the year-on-year growth rate will return to positive territory in the early part of next year," IATA added.