Demand growth for air freight “exceptional” says IATA, as global trade grows

GENEVA – Data for global air freight markets released by IATA shows that demand, measured in freight tonne kilometres (FTKs), increased by 12.1% in August 2017, compared to the same period a year ago. This was the fifth time in six months of double-digit gains on the previous year’s performance.

IATA says demand is growing at exceptional speed when compared to the five-year average growth rate of 4.4%.

Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 4.7% year-on-year in August 2017. Demand growth continues to significantly outstrip capacity growth, which is positive for industry load factors, yields, and financial performance.

IATA says the strong performance of air freight demand corresponds with the pick-up in global trade.

“World trade volumes grew 4.2% in the first seven months of 2017 compared to 2016, their strongest performance since 2011. This is consistent with rising export orders, which are currently around their highest levels since March 2011, and upbeat business confidence indicators,” IATA says.

“Signs that the peak of the cyclical growth period may be near also continue. The global inventory-to-sales ratio in the US, for example, has stopped falling. This usually means that re-stocking to meet demand (which gives air freight a boost), is ending.

“The outlook for air freight remains strong. With several months of double-digit growth in 2017, the current IATA forecast of 7.5% growth in air freight demand for 2017 appears to have significant upside potential even if we are approaching a cyclical peak.”

Alexandre de Juniac, IATA’s Director General and CEO, said rRapid growth in cargo demand means that cargo capacity is now growing in response to real cargo demand rather than automatically as carriers responded to passenger demand.

“The pace of capacity growth, however, has slowed even as freighter fleets are being utilised more intensely. Overall, that should be good news for much beleaguered cargo yields," he said. 

 All regions with the exception of Latin America posted double digit freight growth in August 2017.  

Asia-Pacific airlines’ freight volumes grew 11.3% in August 2017 compared to the same period a year earlier, and capacity increased by 5.7%. Demand growth was strong on all the major routes to, from and within Asia-Pacific, consistent with strong export order books for the region’s manufacturers.

Seasonally-adjusted international freight volumes increased in August after a slight dip in July and are now almost 6% above the volumes reached following the 2010 post-global financial crisis bounce-back.  www.iata.org (ATI).