Global air freight market demand increased 5% year-over-year (YOY) in July—the sector’s biggest rise since February 2015—according to IATA’s Air Freight Market Analysis. Yet worldwide air freight capacity in June outpaced demand, rising 5.2% YOY, and freight yields continued to face downward pressure, ATWonline reported.
Total market freight load factor for the month was 41.3%, down 0.1 point YOY. The year-to-date total market freight load factor is 42.3%, down 1.9 points YOY. Growth in ATKs is largely attributable to increased belly capacity fromongoing additions to the widebody passenger fleet, IATA said.
“Despite the subdued global trade backdrop, carriers in the world’s four biggest air cargo markets—Asia-Pacific, Europe, North American and the Middle East—reported an increase in freight demand,” IATA said.
“July was a positive month for air freight, which is an all-too-rare occurrence,” IATA DG and CEO Alexandre de Juniac said, noting the industry continues to face strong headwinds. “Global trade growth is sluggish and business confidence is weak,” de Juniac said. “And political rhetoric on both sides of the Atlantic is not encouraging for further trade liberalization.”
European carriers’ had the biggest growth in traffic in July, rising 7.2% YOY, in tandem with a strong pick-up in new German export orders, IATA said. “Aside from the Middle East, Europe is the only one of the major regions whose international traffic has now surpassed the level reached during the rebound following the global financial crisis,” IATA senior economist David Oxley said.
Middle East carriers also had a good month, with cargo traffic rising 6.7% YOY. This, however, is a slowdown for the region. “Having increased by almost 14% each year on average between 2012 and 2015, the rate of growth has halved since,” Oxley said, adding “this is mainly attributable to slower growth on the market between the Middle East and Asia, with signs suggesting more traffic is flying directly between Europe and Asia.”
Asia-Pacific cargo traffic increased 4.9% YOY in July, boosted by growth in the ‘within Asia’ air cargo market in recent months, IATA said. “Nonetheless, developments are not broad-based,” Oxley said. “Business surveys from the region are a mixed bag, with exports increasing in Korea, Taiwan and Vietnam, but falling in the larger exporters of Japan and China.”
North American carriers’ cargo traffic was up 4.1% YOY in July, mainly due to domestic freight movement. North American international freight traffic was up only 1.3% YOY in July. “The strength of the US dollar has kept US outbound air freight under pressure for some time,” Oxley said.
African carriers and Latin American carriers saw their total market air freight traffic decline 6.8% YOY and 5.6% YOY, respectively. In Africa, “international freight capacity growth has continued to outstrip that of demand, driven by rapid long-haul expansion, particularly by Ethiopian Airlines,” Oxley said. Difficult economic conditions in much of the South American continent continue to take a toll on the “within South America” market, which has fallen 19.5% year-to-date, IATA said.
