ABU DHABI (March 14, 2017) – After five years of sluggish growth, the global economy will finally begin to pick up this year, which is good news for the air cargo industry, according to the International Air Transport Association.
“In 2017, we are expecting a modest acceleration in that growth,” said George Anjaparidze, senior economist at IATA, speaking at the 11th World Cargo Symposium in Abu Dhabi. “This time, it’s real.”
One key issue, according to Anjaparidze, has been the weakness in world trade. He said that air cargo actually out-performed world trade in 2016, the second time that has happened since 2010.
Factors behind the performance in 2016 include a broadening of growth in the Eurozone, businesses being more reliant on global product launches, cyclical growth and the disruption caused by the bankruptcy of Hanjin Shipping.
While there is room for cautious optimism, Anjaparidze said that it is important to keep in mind some of the risks for the industry, which include the US economy, inflation, Brexit, EU elections, capital flight from emerging markets and trade wars.
Even though yields have been stable, the combination of increasing capacity and the rise in fuel prices puts pressure on profitability.
“But on the demand side, we’ve seen a good start to 2017 and there are some positive tailwinds in the form of strong export orders and good consumer confidence,” Anjaparidze said. “So overall, our expectations for growth in 2017 are comparable to the growth we’ve seen in 2016.”
