Air Cargo Peak Season off to Slow Start. (Photo: IATA).
Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 2,2% year-on-year in October 2019. Capacity growth has now outstripped demand growth for the 18th consecutive month.
Over the past year, air cargo has suffered from the effects of the trade war between the US and China, the deterioration in global trade, and a broad-based slowing in economic growth.
“Air cargo’s peak season is off to a disappointing start, with demand down 3,5% in October. Demand is set to decline in 2019 overall – the weakest annual outcome since the global financial crisis. It has been a very tough year for the air cargo industry,” said Alexandre de Juniac, IATA’s Director General and CEO.
(Photo: IATA).
Regional Performance
Airlines in Asia-Pacific and the Middle East suffered sharp declines in year-on-year growth in total air freight volumes in October 2019, while Latin American and European carriers experienced a more moderate decline. Africa was the only region to record growth in air freight demand compared to October last year.
Asia-Pacific airlines saw demand for air freight contract by 5,3% in October 2019, compared to the same period in 2018. Capacity increased by 0,6%. The US-China and South Korea-Japan trade wars have negatively affected the region. And the disruption to operations at Hong Kong International Airport – the largest cargo hub in the world – continues to impact activity. However, the thawing of US-China trade relations and robust economic growth in key regional economies are positive developments.
North American airlines saw demand decrease by 2,4% in October 2019, compared to the same period a year earlier. Capacity increased by 3.1%. The underlying strength of the US economy has seen domestic air cargo outperform international which, as noted above, has also been impacted by the trade tensions with China.
European airlines posted a 1,5% decrease in freight demand in October 2019 compared to the same period a year earlier – a significant improvement over the 3,5% decrease in September. Better than expected economic activity in Q3 in several of the region’s large economies helped support demand. Capacity increased by 2,8% year-on-year.
Middle Eastern airlines’ freight volumes decreased 6,0% in October 2019 compared to the year-ago period. This was the sharpest drop in freight demand of any region for the month. Capacity increased by 0,9%. Against a backdrop of operational and geopolitical challenges facing some of the region’s key airlines, seasonally adjusted freight volumes in the region have resumed a modest upwards trend which is a positive development for the region’s carriers.
Latin American airlines experienced a decrease in freight demand in October 2019 of 2,6% compared to the same period last year. Various social and economic headwinds in the region’s key economies have impacted the region’s air cargo performance. Capacity increased by 2,3% year-on-year.
African carriers posted the fastest growth of any region in October 2019, with an increase in demand of 12,6% compared to the same period a year earlier. Strong trade and investment links with Asia contributed to the positive performance. Freight volumes on key Africa-Asia routes were up 23% annually in September (latest available data). Capacity grew 13,9% year-on-year.
IATA
Nguyen Xuan Nghia – COMM
