Air cargo records worst performance in three years

Air cargo records worst performance in three years

Global air freight demand fell by 4.7% in February, 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 meanwhile, rose by 2.7% year-on-year in February 2019 – the twelfth month in a row that capacity growth outstripped demand growth.   

IATA, which represents 290 airlines comprising 82% of global air traffic, said air freight demand is being dragged down by three key factors: trade tensions; weakening global economic activity and consumer confidence; and falling global export orders.  

Alexandre de Juniac, IATA’s Director General and CEO (pictured above), 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

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%. 

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%. 

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. 

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.   

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%.

African carriers saw freight demand decrease by 8.5% 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% higher than their most recent trough in late-2015. Capacity grew 6.8% year-on-year.

Total freight traffic market shares by region of carriers are: Asia-Pacific 35.5%, Europe 23.3%, North America 23.6%, Middle East 13.3%, Latin America 2.6%, and Africa 1.7%.