Air Freight Growth Slows to 22-Month Low as Restocking Cycle Ends  

The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), rose 1.7% in March 2018, compared to the same period the year before. This was five percentage points lower than the February result and the slowest pace of growth in 22 months.

The year-on-year increase in capacity, measured in available freight tonne kilometers (AFTK) fell to 4.4% compared to 6.3% in February. This was the first time in 20 months, however, that annual capacity rose faster than demand.

The sharp growth slowdown is principally due to the end of the restocking cycle, during which businesses rapidly increased their inventory to meet unexpectedly high demand. A softening of global trade is also evident.

Middle East carriers saw growth of 0.8% in March compared to March 2017. This is consistent with the general weakening in regional performance over recent months.

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"It's normal that growth slows at the end of a restocking cycle. That clearly has happened. Looking ahead we remain optimistic that air cargo demand will grow by 4-5% this year. But there are obviously some headwinds. Oil prices have risen strongly, and economic growth is patchy. The biggest damage could be political. The implementation of protectionist measures would be an own-goal for all involved—especially the US and China," said Alexandre de Juniac, IATA's Director General and CEO (Source: IATA).