Air freight demand had a slow start to 2019, reports IATA
March 7, 2019: The International Air Transport Association (IATA) has released traffic figures for January 2019 which show us that demand, measured in freight tonne kilometers (FTKs), decreased 1.8 percent year-on-year.
Global economic activity, weakening of consumer confidence and the Purchasing Managers Index (PMI) for manufacturing and export orders has indicated falling global export orders since September 2018. This was the worst performance in the last three years, reports IATA.
And freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 4.0 percent year-on-year in January 2019. This was the eleventh month in a row that capacity growth outstripped demand growth.
Coming to region wise, weaker manufacturing conditions for exporters in the region, ongoing trade tensions and a slowing of the Chinese economy impacted the demand for Asia-Pacific airlines. The demand for them shrank by 3.6 percent in January 2019, compared to the same period in 2018. Capacity increased by 4.1 percent.
North American airlines posted the fastest growth of any region for the eighth consecutive month in January 2019, with an increase in demand of 3.3 percent year-on-year. Capacity increased by 5.0 percent. The strength of the US economy and consumer spending have helped support the demand for air cargo over the past year, benefiting US carriers.
European airlines experienced a contraction in freight demand of 3.1 percent in January 2019 compared to a year ago. Capacity increased by 2.8 percent year-on-year. Weaker manufacturing conditions for exporters, and shorter supplier delivery times particularly in Germany, one of Europe's key export markets, impacted demand. Trade tensions and uncertainty over Brexit also contributed to a weakening in demand.
Middle Eastern airlines' freight volumes contracted 4.5 percent in January 2019 compared to the year-ago period. Capacity increased by 4.1 percent. Seasonally-adjusted international air cargo demand, which trended upwards for the past three months helped by strong trade to/from Europe and Asia, has started to decline.
Latin American airlines' freight demand was flat (0.0 percent) in January 2019 versus last year. Despite the economic uncertainty in the region, a number of key markets are performing strongly. Freight traffic within South America and between Central and South America grew at a double-digit rate in January. And demand on routes between North and South America also performed well. Capacity decreased by 0.7 percent.
African carriers saw freight demand increase by 1.0 percent in January 2019, compared to the same month in 2018. Capacity grew 8.2 percent year-on-year. Seasonally-adjusted air cargo demand has now trended upwards for six months. And while seasonally-adjusted international freight volumes are lower than their peak in mid-2017, they are still 35 percent higher than their most recent trough in late-2015.
"This is a worsening of a weakening trend that started in mid-2018. Unless protectionist measures and trade tensions diminish there is little prospect of a quick re-bound," said Alexandre de Juniac, IATA's director general and CEO.
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