Trade war takes toll on global air freight demand

The trade tension between the US and China is affecting air freight demand globally, the president of Dnata said.

“At the moment, the problem is the geopolitical situation,” Gary Chapman told The National at the Middle East and North Africa Leaders Forum in Ras Al Khaimah

“The trade war going on between China and the US is spreading. Generally, air freight is down year-on-year and is not showing any signs of getting worse but it is down below where it was. Right across the globe, there is less cargo movement.

“In Dubai, we are down about between 5 and 6 per cent, yearto-date compared to the previous year. There are places in the world which are down about 10 to 12 per cent and globally, it is between 5 and 10 per cent.”

The comments come as global air freight markets suffer a 2.2 per cent year-on-year decline in demand in July 2019 as trade tension between the world’s two biggest economies continue affecting global economic growth, the International Air Transport Association said in a report last month.

Middle Eastern airlines registered the sharpest drop in freight demand of any region with freight tonne kilometres of cargo decreasing 5.5 per cent in July, compared to a year earlier.

“There are no signs of improvement at the moment, until a resolution is found and things settle down between US and China, I suspect this will continue,” Mr Champman said. Dnata is not looking to add new freight planes to increase its capacity due to the current downturn but will look for new opportunities to expand its operations globally.

“We just opened a new cargo facility in Heathrow and we are continuing to invest in the future and looking at new opportunities,” he added.

The ground handling division of Emirates airline also opened new catering facilities in seven different locations in the US, he added.

Dnata operates in 35 countries handling more than 8,500 tonnes of cargo daily. The company made a profit of Dh1.4 billion during the 201819 fiscal year.