AIR FREIGHT DECLINES FOR EIGHTH CONSECUTIVE MONTH

The International Air Transport Association (IATA) recently reported that global air freight demand, measured in freight tonne kilometers (FTKs), decreased by nearly 5% in June year-on-year, marking the eighth consecutive month of decline in freight volumes.

 

The air freight contraction was seen across all regions, led by airlines in Asia-Pacific and the Middle East with Africa the only one showing year-on-year growth in total air freight volumes in June.

 

Asia-Pacific airlines saw demand for air freight contract by 5.4% in June 2019, compared to the same period in 2018. IATA noted that the US-China trade war is not the sole responsible for the fall as FTKs for the within-Asia market have also decreased more than 10% over the past year. Air freight capacity, meanwhile, increased by 1.8% over the same period.  

 

Middle Eastern airlines’ freight volumes decreased 7.0% during the period. Capacity increased by 2.7%. IATA said that seasonally-adjusted demand has been falling since late 2018, and the latest data show volumes to Europe (-7.2%) and Asia-Pacific (-6.5%) were particularly weak.  

 

North American airlines’ freight demand also dropped in June by 4.6% compared to a year ago even if capacity increased by 1.9%. US-China trade tensions was the main drag weighing on the performance, with FTKs to Asia down 5%. FTKs on routes to/from Europe, South America and Middle East were also lower.


 European airlines posted a 3.6% decrease in freight demand in June from the same period in 2018. Comparatively strong cargo volumes within Europe, however, are helping to minimize the impact of weaker German exports, IATA said. Capacity during the period increased by 2.8% year-on-year. 

 

Latin American airlines also experienced a slowdown in freight demand in June, contracting 1.0% compared to its June 2018 performance. Capacity, however, increased by 4.6%.

 

"Much of the decline in traffic can be attributed to weakness in the within-South America market (especially Brazil and Argentina) where FTKs fell 6.5%," IATA said.

 

Meanwhile, African carriers were the only ones to report growth in June 2019, with an increase in demand of 3.8% compared to the same period a year earlier. This makes Africa the strongest performer for the fourth consecutive month. Capacity grew 16.6%. Route analysis shows that the Africa-Asia performance is strong—up 12% year-on-year.

 

IATA said capacity growth remains subdued and the cargo load factor continues to fall. Globally, trade growth is languishing, and business uncertainty is compounded by the latest tariff increases in the US-China trade dispute.

“Global trade continues to suffer as trade tensions – particularly between the US and China – deepen. As a result, air cargo markets continue to contract. Nobody wins a trade war. Borders that are open to trade spread sustained prosperity. That’s what our political leaders must focus on,” said Alexandre de Juniac, IATA’s director general and CEO.