Global air freight demand up 5.9 percent in October: IATA
December 4, 2017: The recent data release by the International Air Transport Association (IATA) indicated a spur of 5.9 percent in the overall global air freight markets in October 2017, compared to the same period, last year.
Interestingly, the IATA data hinted at a slowdown from the 9.2 percent annual growth recorded in September 2017. However, it still exceeded the average annual growth rate of 3.2 percent over the past decade.
It’s the 15th consecutive month that the demand growth outstripped the capacity growth, which is believed to be a positive indicator for load factors, yields, and financial performance.
While the demand in the cargo markets remains strong, several indicators show that it may have passed the growth peak. The inventory-to-sales ratio in the US is looking sideways, thereby indicating that the period when companies look to restock inventories quickly—which often gives air cargo a boost—has ended.
The new export orders component of the global Purchasing Managers’ Index (PMI) is stable. And the upward trend in seasonally-adjusted freight volumes has moderated.
Freight volumes are still expected to grow in 2018, although at a slower pace than in 2017.
“The demand for air freight grew by 5.9 percent in October. And tight supply conditions in the fourth quarter should see the air cargo industry deliver its strongest operational and financial performance since the post-global financial crisis in 2010," said Alexandre de Juniac, director general and CEO of IATA.
Similarly, airlines in from across all regions reported an increase in overall year-on-year demand in October. However, in contrast, international freight growth slumped in all regions except Africa.
Meanwhile, airlines in the Asia-Pacific region witnessed an increase in freight volumes by 4.4 percent, and the capacity expanded by 3.9 percent in October 2017, compared to the same period last year.