Freight capacity rises by 2.1%
The International Air Transport Association (IATA) has released data for the Middle East air freight market showing that demand for air cargo, measured in freight tonne kilometers (FTKs), decreased by 8.0% in September 2019 compared to the year-ago period.
This was the sharpest drop in freight demand of any region. Capacity decreased by 0.4%. Escalating trade tensions and the slowing in global trade have affected the region’s performance due to its strategic position as a global supply chain link.
Most key routes to and from the region have seen weak demand in the past few months. The large Europe to Middle East and Asia to Middle East routes were down 8% and 5% respectively in August (last data available) compared to a year ago.
Meanwhile, globally demand receeded by 4.5% in September 2019, compared to the same period in 2018.
Globally, this marks the eleventh consecutive month of year-on-year decline in freight volumes, the longest period since the global financial crisis in 2008.
Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 2.1% year-on-year in September 2019. Capacity growth has now outstripped demand growth for the 17th consecutive month.
Air cargo continues to suffer from a number of factors such as an intensifying trade war, deterioration in global trade and weakness in some key economic drivers.
Global export orders continue to fall. The Purchasing Managers Index (PMI) tracking new manufacturing export orders has pointed to falling orders since September 2018.
Alexandre de Juniac, IATA's Director General and CEO says: “The US-China trade war continues to take its toll on the air cargo industry. October’s pause on tariff hikes between Washington and Beijing is good news.
“But trillions of dollars of trade is already affected, which helped fuel September’s 4.5% year-on-year fall in demand. And we can expect the tough business environment for air cargo to continue.”
Read More: US-China Trade War Hits Air Cargo Hard