IATA’s November cargo stats offer a glimmer of hope

Nov IATA

A glimmer of hope was offered up in the International Air Transport Association’s (IATA) lastest data for global air freight markets which showed demand, measured in freight tonne kilometres (FTKs), decreased by only 1.1 per cent in November 2019 year-on-year.

While the thirteenth consecutive month of year-on-year declines in freight volumes, November’s performance was the best in eight months, with the slowest year-on-year rate of contraction recorded since March 2019. IATA notes that, in part, November’s outcome reflects the growing importance of large e-commerce events such as Singles Day in Asia and Black Friday in the West.

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While international e-commerce continues to grow, overall air cargo demand continues to face headwinds from the effects of the trade war between the US and China, the deterioration in world trade, and a broad-based slowing in global economic growth.

“Demand for air cargo in November was down 1.1 per cent compared to the previous year. That’s better than the 3.5 per cent decline posted in October. But it is a big disappointment considering that the fourth quarter is usually air cargo’s peak season.

“Looking forward, signs of a thawing in US-China trade tensions are good news. But trading conditions at present remain very challenging,” says Alexandre de Juniac, IATA’s director general and CEO.

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 2.9 per cent year-on-year in November 2019, with capacity growth now outstripping demand growth for 19 consecutive months.

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Regional performance

Airlines in Asia-Pacific, Latin America and the Middle East suffered sharp declines in year-on-year growth in total air freight volumes in November 2019, while North American carriers experienced a more moderate decline. Europe and Africa were the only regions to record growth in air freight demand compared to November 2018.

Asia-Pacific airlines saw demand for air freight contract by 3.7 per cent in November 2019, compared to the year-earlier period. This was the sharpest drop in freight demand of any region for the month. Capacity increased by 1.8 per cent. The US-China trade war has significantly affected the region, with demand on the large Asia-North America market down 6.5 per cent year-on-year in October (latest available data). However, the thawing of US-China trade relations and robust economic growth in key regional economies are positive developments, IATA notes.

North American airlines saw demand decrease by 1.1 per cent in November 2019, compared to the same period a year earlier. Capacity increased by 3.3 per cent. Slower growth in the US economy and trade tensions with China have affected demand. However, positive progress in trade negotiations between both countries highlighted by the ‘phase one’ deal is a positive development.

European airlines posted a 2.6 per cent increase in freight demand in November 2019 compared to the same period a year earlier. Better than expected economic activity in the third quarter in some of the region’s large economies helped support demand. Capacity increased by 4.0 per cent year-on-year.

Middle Eastern airlines’ freight volumes decreased 3.0 per cent in November 2019 compared to the year-ago period – a significant improvement over the 5.7 per cent decrease in October. Capacity increased by 2.6 per cent. Against a backdrop of operational and geo-political challenges facing some of the region’s key airlines, seasonally-adjusted freight volumes in the region have continued a modest upwards trend, which is a positive development for the region’s carriers. However, escalating geopolitical tensions threaten the regions’ carriers in the period ahead.

Latin American airlines experienced a decrease in freight demand in November 2019 of 3.4 per cent compared to November 2018. Various social and economic headwinds in the region’s key economies have impacted the region’s air cargo performance. Capacity decreased by 2.3 per cent year-on-year.

African carriers posted the fastest growth of any region in November 2019, with an increase in demand of 19.8 per cent compared to the same period a year earlier. Strong trade and investment links with Asia contributed to the positive performance. Capacity grew a substantial 13.7 per cent year-on-year.

 

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IATA’s November cargo stats offer a glimmer of hope
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IATA’s November cargo stats offer a glimmer of hope
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A glimmer of hope was offered up in the International Air Transport Association’s (IATA) lastest data for global air freight markets which showed demand, measured in freight tonne kilometres (FTKs), decreased by only 1.1 per cent in November 2019 year-on-year.
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AsiaCargoBuzz.com
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