Demand for air freight strengthens globally in July: IATA

Monday, 19 September 2016 00:01 - - {{hitsCtrl.values.hits}}

IATA’s data for global air freight markets in July 2016 shows a robust growth in demand.

Measured in freight tonne kilometres (FTKs), demand increased 5.0% in July 2016, compared to July 2015. This was the fastest pace in almost 18 months. Freight capacity measured in available freight tonne kilometres (AFTKs) increased by 5.2% year-on-year, outstripping demand and keeping yields under pressure.

Despite the subdued global trade backdrop, carriers in the world’s four biggest air cargo markets – Asia Pacific, Europe, North America and the Middle East – reported an increase in freight demand. The strongest growth occurred in Europe and the Middle East, with July demand up by 7.2% and 6.7% respectively, compared to the same period last year.

“July was a positive month for air freight – which is an all too rare occurrence. Despite that, we must recognise that we face some strong headwinds on fundamental aspects of the business. Global trade growth is sluggish and business confidence is weak. And the political rhetoric on both sides of the Atlantic is not encouraging for further trade liberalisation,” said IATA Director General and CEO Alexandre de Juniac.

Regional performance

Asia Pacific airlines reported a 4.9% increase in demand for air cargo in July compared to last year. In particular, growth has been driven by strong increases in the large ‘within Asia’ market in recent months, but the latest business surveys from the region paint a mixed picture. Capacity in the region expanded 2.7%.

North American carriers saw freight volumes expand 4.1% in July 2016 compared to the same period last year, and capacity increase by 3.4%. International freight volumes (which grew 1.3% in July) continue to suffer from the strength of the US dollar which has kept the US export market under pressure.

European airlines posted the largest increase in freight demand of all regions in July, 7.2% year-on-year. Capacity increased 3.8%. The positive European performance corresponds with an increase in export orders in Germany over the last few months. Europe’s freight volumes have now surpassed the level reached during the air freight rebound following the Global Financial Crisis. The only other region to achieve this is the Middle East. Middle Eastern carriers saw air freight demand increase by 6.7% in July 2016 year-on-year. Capacity increased by 11%. The region’s growth rate, while still strong, has eased to half the 14% recorded annually between 2012 and 2015. This is mainly attributable to slower freight growth between the Middle East and Asia.

Latin American airlines saw demand contract by 5.6% in July 2016 compared to the same period last year and capacity increase by 10.1%. The region continues to be blighted by weak economic and political conditions, particularly in the region’s largest economy, Brazil. African carriers recorded a 6.8% decrease in year-on-year freight demand in July 2016 – the largest decline in seven years. African airlines’ capacity surged by 31.3% on the back of long-haul expansion (from a small base).