Cargo traffic up by 6.8 percent y/y in February but protectionist risks remain, says IATA
April 05, 2018: The latest statistics from industry body International Air Transport Association (IATA) reveal that cargo traffic in FTKs (Freight Tonne Kilometres) has seen 6.8 percent growth in February compared to the same period last year.
Adjusting for the potential Lunar New Year distortions by combining growth in January 2018 and February 2018, demand increased by 7.7 percent. This was the strongest start to a year since 2015.
Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 5.6 percent year-on-year in February 2018. Demand growth outstripped capacity growth for the 19th month in a row, which is positive for airline yields and the industry's financial performance.
Amidst strong air cargo growth, IATA warns of protectionism to the industry. "The positive outlook for the rest of 2018, however, faces some potentially strong headwinds, including escalation of protectionist measures into a full-blown trade war. Prosperity grows when borders are open to people and to trade, and we are all held back when they are not," said Alexandre de Juniac, IATA's director general and CEO.
IATA says that demand for air freight in recent years has benefitted from stronger global trade backdrop, as well as an inventory restocking cycle. The latter factor helped air freight growth to outperform global goods trade in 2017 by the widest margin since 2010.
In recent months the Purchasing Managers’ Index (PMI) for manufacturing and export orders has softened in a number of key exporting nations including Germany, China and the US. And the seasonally- adjusted demand for air cargo which rose at a double-digit annualised rate for much of 2017 is now trending at 3 percent.
Asia-Pacific airlines saw demand in freight volumes grow 6.5 percent in February 2018 and capacity increase by 7.2 percent, compared to the same period in 2017. “As the largest freight-flying region, carrying close to 37 percent of global air freight, the risks from protectionist measures impacting the region are disproportionately high,” informs IATA.
North American airlines’ freight volumes expanded 7.3 percent in February 2018 compared to the same period a year earlier, and capacity increased by 4.1 percent.
The weakening of the US dollar over the past year has helped boost demand for air exports.
European airlines posted a 5.7 percent increase in freight volumes in February 2018. This was the slowest of all regions. Capacity increased 3.8 percent. The strength of the Euro and the risks from protectionist measures may impact the European freight market which has benefitted from strong export orders, particularly in Germany, in recent years.
Middle Eastern carriers’ year-on-year freight volumes increased 7.4 percent in February 2018 and capacity increased 7.6 percent.
Strong growth on the trade lanes to and from Asia as well as ongoing foreign investment flows into Africa has helped African carriers witness the largest increase of any region. African carriers’ see freight demand increase by 15.9 percent in February 2018 compared to the same month last year.
Latin American airlines experienced growth in demand of 8.7 percent in February 2018 and a capacity increase of 6.9 percent. The pick-up in demand over the last 18 months comes alongside signs of economic recovery in the region’s largest economy, Brazil.
¹% of industry FTKs in 2017 ²Year-on-year change in load factor ³Load factor level