Air freight in decline for eighth consecutive month, reports IATA

Aug 8, 2019: The International Air Transport Association (IATA) June air cargo traffic report showed us the air cargo volumes continued to decline for the eighth consecutive month in June.

The demand, measured in freight tonne kilometers (FTKs), decreased by 4.8 percent in June 2019, compared to the same period in 2018.

According to IATA, the air cargo markets continue to contract due to business uncertainty compounded by the latest tariff increases in the US-China trade dispute.

Signs of a modest recovery in recent months appear to have been premature, with the June contraction broad-based across all regions with the exception of Africa. Capacity growth remains subdued and the cargo load factor continues to fall, reported IATA.

The Asia Pacific airlines saw demand contract by 5.4 percent year-on-year in June 2019, whereas the capacity increased by 1.8 percent over the same period. Although an important factor, the US-China trade war is not solely responsible for the fall, said IATA.

US-China trade tensions impacted North American airlines' freight demand, with FTKs to Asia down 5 percent. The demand declined 4.6 percent year-on-year in June 2019, whereas capacity increased by 1.9 percent over the past year.

European airlines posted a 3.6 percent decrease in freight demand in June 2019 compared to the same period a year earlier. Comparatively strong cargo volumes within Europe are helping to minimise the impact of weaker German exports. Capacity increased by 2.8 percent year-on-year.

Middle East Airlines saw the sharpest decline in June in freight volumes. Demand fell 7 percent year-on-year, whereas capacity increased by 2.7 percent.

Seasonally-adjusted demand has been falling since late 2018, and the latest data show volumes to Europe (-7.2 percent) and Asia-Pacific (-6.5 percent) were particularly weak.

Latin American airlines experienced a decrease in freight demand in June 2019 of 1.0 percent compared to the same period last year and capacity increased by 4.6 percent. Much of the decline in traffic can be attributed to weakness in the within-South America market (especially Brazil and Argentina) where FTKs fell 6.5 percent.

Surprisingly, African carriers record the strongest performance for the fourth consecutive month. The airlines saw growth of 3.8 percent year-on-year, whereas capacity grew 16.6 percent. African carriers were the only ones to report growth in June 2019. Route analysis shows that the Africa-Asia performance is strong—up 12 percent year-on-year.