Air Freight demand contracts 2.0% in Africa-IATA
- modest 4.2% growth in rest of world
African airlines saw freight demand contract 2.0% in May compared with the same month in 2017. At the same time, capacity (supply) increased by 20.4%.
Following a surge in international freight tonne kilometres (FTK*) volumes in 2017, seasonally-adjusted international freight volumes have now trended downwards at an annualised pace of 15% over the past six months.
In the main, this reflects a softening demand for air freight between Africa and Asian and Middle Eastern markets.
The International Air Transport Association (IATA) latest analysis of demand for passenger air travel will be released tomorrow.
IATA released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), rose 4.2% in May 2018, compared to the same period the year before. This was slightly down from the 5.2% (revised from 4.1%) growth in annual demand recorded in April 2018.
Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 6.2% year-on-year in May 2018. This was the fourth month in a row that capacity growth outstripped demand growth.
After a weak start to 2018, demand for global air freight has now resumed a modest trend upwards. However, the rapid growth seen in 2017 is now over, with demand growing at a significantly slower pace in 2018. In IATA’s mid-year industry outlook, 2018 freight growth was revised downwards to 4.0% (from the previously forecasted 4.5% in December 2017)
There are three indications that growth will continue at a slower pace:
- The re-stocking cycle which required quick delivery to meet customer needs is over
- The new export orders component of the global manufacturing Purchasing Managers’ Index (PMI) is at a 21- month low
- Global trade appears to be softening as trade tensions increase
“We expect air cargo demand to grow by a modest 4.0% in 2018. That’s an uptick from a very weak start to the year. But headwinds are strengthening with growing friction among governments on trade. We still expect demand to grow, but those expectations are dampened with each new tariff introduced. Experience tells us that trade wars, in the long run, only produce losers,” said Alexandre de Juniac, IATA’s Director General and CEO.
