IATA reports slowing air freight demand in February

Published April 18, 2019, 12:00 AM

by manilabulletin_admin

By Emmie V. Abadilla

International air cargo is in the doldrums as order books weaken, consumer confidence deteriorates and trade tensions hang over the aviation industry.

International Air Transport Association (IATA) logo (MB file/mb.com.ph)
International Air Transport Association (IATA) logo (MB file/mb.com.ph)

Global air freight markets, measured in freight tonne kilometers (FTKs), decreased 4.7% this February versus to the same period in 2018, the fourth consecutive month of negative year-on-year growth and the worst performance in the last three years, according to the latest data from the International Air Transport Association (IATA).

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 2.7% year-on-year in February 2019. This was the 12th month in a row that capacity growth outstripped demand growth.

Indeed, “It is difficult to see an early turnaround,” IATA’s Director General and CEO Alexandre de Juniac acknowledged.

“The industry is adapting to new markets for e-commerce and special cargo shipments. But the bigger challenge is trade is slowing. Governments need to realize the damage being done by protectionist measures. Nobody wins a trade war. We all do better when borders are open to people and to trade,” he stressed.

All regions reported a contraction in year-on-year demand growth in February 2019 except for Latin America.

Asia-Pacific airlines saw demand for air freight contract by 11.6% in February 2019, compared to the same period in 2018. Weaker manufacturing conditions for exporters in the region, ongoing trade tensions and a slowing of the Chinese economy impacted the market. Capacity decreased by 3.7%.

Middle Eastern airlines’ freight volumes contracted 1.6% in February 2019 compared to the year-ago period. Capacity increased by 3.1%. A clear downward trend in seasonally-adjusted international air cargo demand is now evident with weakening trade to/from North America contributing to the decrease.

North American airlines saw demand contract by 0.7% in February 2019, compared to the same period a year earlier. This was the first month of negative year-on-year growth recorded since mid-2016, reflecting the sharp fall in trade with China. North American carriers have benefited from the strength of the US economy and consumer spending over the past year. Capacity increased by 7.1%.

Latin American airlines posted the fastest growth of any region in February 2019 versus last year with demand up 2.8%. Despite the economic uncertainty in the region, a number of key markets are performing strongly. Seasonally-adjusted international freight demand achieved growth for the first time in six months. Capacity increased by 14.1%.

European airlines experienced a contraction in freight demand of 1.0% in February 2019 compared to a year ago. The decline is consistent with weaker manufacturing conditions for exporters in Germany, one of Europe’s major economies. Trade tensions and uncertainty over Brexit also contributed to a weakening in demand. Capacity increased by 4.0% year-on-year.

 
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