FREIGHTED WITH HOPE
Boom linked to rise in global trade, orders
Global air freight demand showed further robust growth in July, reflecting an uptick in global trade.
Global air freight demand showed further robust growth in July, reflecting an uptick in global trade, rising export orders and upbeat business confidence indicators.
The latest data from the International Air Transport Association (IATA) showed that demand measured in freight tonne kilometres soared by 11.4% in July compared with the same period a year ago.
This was the fourth time in five months that double-digit annual growth was recorded. July’s year-on-year increase in demand is nearly four times higher than the 10-year average growth rate of 3.1%, the global airline industry pointed out.
Freight capacity, measured in available freight tonne kilometres, grew by 3.7% year-on-year in July.
Demand growth continues to significantly outstrip capacity growth, which is positive for airline yields and the industry’s financial performance.
In its analysis, the IATA said the resurgence in air freight demand over the past year or so has been set against a stronger global economic and trade backdrop.
The turnaround in trade conditions has been most visible in rising trends in the new export orders components of manufacturing purchasing managers’ indices (PMIs) among the world’s major exporters since early 2016.
Meanwhile, data from the Netherlands Bureau for Economic Policy show that global trade volumes grew by 4.1% in the first half of this year, compared with the same period in 2016.
This was the strongest first half of a year for world trade since 2011.
Despite the continued growth in freight demand in July, IATA renewed its caution that demand growth for air freight may be nearing a peak.
“Seasonally adjusted air freight volumes were flat in June and fell in July, and the global inventory-to-sales ratio has stabilised,” IATA said. “Air cargo often sees a boost in demand at the beginning of an economic upturn as companies look to restock inventories quickly. This tapers as inventories are adjusted to new demand levels.”
Airlines from all regions posted robust freight growth in July: Asia-Pacific (11%), North America (11.9%), Europe (12.1%), the Middle East (9.3%), Latin America (5.8%) and Africa (33.7%), which registered the largest year-on-year increase in demand.