Air cargo demand strengthens in July
IATA reports
Despite sluggish global trade, air freight demand in Asia-Pacific, Europe, North America and the Middle East grew briskly, registering 5.0% growth, measured in freight ton kilometers (FTKs), the fastest in 18 months as of July, 2016.
“July was a positive month for air freight — an all too rare occurrence,” says International Air Transport Association (IATA)’s new Director General and CEO Alexandre de Juniac.
“Despite that, we must recognize that we face some strong headwinds on fundamental aspects of the business. Business confidence is weak. And the political rhetoric on both sides of the Atlantic is not encouraging for further trade liberalization,” he added.
Freight capacity measured in available freight ton kilometers (AFTKs) increased by 5.2% year-on-year, outstripping demand and keeping yields under pressure, according to the latest data from IATA.
The strongest growth occurred in Europe and the Middle East, with July demand up by 7.2% and 6.7% respectively, compared to the same period last year.
Asia-Pacific airlines reported a 4.9% increase in demand for air cargo. Strong increases in the large “within Asia” market in recent months fueled growth. However, the latest business surveys from the region showed a mixed picture. Capacity in the region expanded 2.7%.
Middle Eastern carriers saw air freight demand increase by 6.7% in July 2016 year-on-year. Capacity increased by 11%.
The region’s growth rate, while still strong, has eased to half the 14% recorded annually between 2012 and 2015. This is mainly attributable to slower freight growth between the Middle East and Asia.
European airlines posted the largest increase in freight demand of all regions in July, 7.2% year-on-year and capacity increased 3.8%.
The positive European performance corresponds with an increase in export orders in Germany over the last few months. Europe’s freight volumes have now surpassed the level reached during the air freight rebound following the Global Financial Crisis.
The only other region to achieve this is the Middle East.
North American carriers saw freight volumes expand 4.1% in July 2016 compared to the same period last year, and capacity increase by 3.4%. International freight volumes (which grew 1.3% in July) continue to suffer from the strength of the US dollar which has kept the US export market under pressure.
Latin American airlines saw demand contract by 5.6% in July 2016 compared to the same period last year and capacity increase by 10.1%. The region continues to be blighted by weak economic and political conditions, particularly in the region’s largest economy, Brazil.
African carriers recorded a 6.8% decrease in year-on-year freight demand in July 2016 – the largest decline in seven years. African airlines’ capacity surged by 31.3% on the back of a long-haul expansion from a small base.