May Air Freight Volumes Remain Weak: IATA
The International Air Transport Association (IATA) has released data for global and regional air freight markets showing that global demand, measured in freight tonne kilometers (FTKs), decreased by 3.4% in May 2019, compared to the same period in 2018.
This was a slight improvement on the 5.6% contraction in April.
Global air freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 1.3% year-on-year in May 2019. Capacity growth has now outstripped demand growth for the 13th consecutive month.
Middle Eastern airlines’ freight volumes decreased 6.9% in May 2019 compared to the year-ago period.
Capacity also decreased by 1.6%.
A clear downward trend in seasonally-adjusted international air cargo demand is now evident with weakening air freight volumes to/from North America and to/from Asia Pacific contributing to the softer performance.
Once again, these flows reflect the broader weakness in global trade volumes, combined with the impact of the restructuring of airline business models currently underway in the region.
In seasonally-adjusted terms, the level of FTKs increased modestly for the third consecutive month, suggesting that the low point of this cycle may be behind, although the market remains weak.
Overall, air cargo demand has suffered from very weak global trade volumes and trade tensions between the US and China. This has contributed to declining new export orders.
The indicator for new manufacturing export orders, part of the global Purchasing Managers Index (PMI), has indicated falling orders since September 2018.
Said Alexandre de Juniac, IATA's Director General and CEO: “The impact of the US-China trade war on air freight volumes in May was clear. Year-on-year demand fell by 3.4%. It’s evidence of the economic damage that is done when barriers to trade are erected.
“Renewed efforts to ease the trade tensions coming on the sidelines of the G20 meeting are welcome. But even if those efforts are successful in the short-term, restoring business confidence and growing trade will take time. And we can expect the tough business environment for air cargo to continue,”
Airlines in Asia-Pacific and the Middle East suffered sharp declines in year-on-year growth in total air freight volumes in May 2019, while North America and Europe experienced more moderate declines. Africa, and Latin America both recorded growth in air freight demand compared to May last year.
African carriers posted the fastest growth of any region in May 2019, with an increase in demand of 8.0% compared to the same period a year earlier. This continues the upwards trend in FTKs that has been evident since mid-2018 and makes Africa the strongest performer for the third consecutive month.