Air freight demand continued decreasing in February 2019

IATA has released data for global air freight markets showing that demand, measured in freight tonne kilometres (FTKs), decreased 4.7 per cent in February 2019, compared to the same period in 2018. This was the fourth consecutive month of negative year-on-year growth and the worst performance in the last three years.

Freight capacity, measured in available freight tonne kilometres (AFTKs), rose by 2.7 per cent year-on-year in February 2019. This was the 12th consecutive month that capacity growth outstripped demand growth.

Demand for air cargo continues to face significant headwinds:

• Trade tensions weigh on the industry
• Global economic activity and consumer confidence have weakened
• The Purchasing Managers Index (PMI) for manufacturing and export orders has indicated falling global export orders since September 2018.

Alexandre de Juniac, IATA’s Director General and CEO, said: “Cargo is in the doldrums with smaller volumes being shipped over the last four months than a year ago, and with order books weakening, consumer confidence deteriorating and trade tensions hanging over the industry, it is difficult to see an early turnaround. 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 realise 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.”

Regional performance

Asia-Pacific airlines saw demand for air freight contract by 11.6 per cent 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 per cent.

North American airlines saw demand contract by 0.7 per cent 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 U.S. economy and consumer spending over the past year. Capacity increased by 7.1 per cent.

European airlines experienced a contraction in freight demand of 1.0 per cent 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 per cent year-on-year.

Middle Eastern airlines’ freight volumes contracted 1.6 per cent in February 2019 compared to the year-ago period. Capacity increased by 3.1 per cent. 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.

Latin American airlines posted the fastest growth of any region in February 2019 versus last year with demand up 2.8 per cent. 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 per cent.

African carriers saw freight demand decrease by 8.5 per cent in February 2019, compared to the same month in 2018. Seasonally-adjusted international freight volumes are lower than their peak in mid-2017; despite this, they are still 25 per cent higher than their most recent trough in late-2015. Capacity grew 6.8 per cent year-on-year.