IATA's latest data for global air freight markets shows
that demand, measured in freight tonne kilometers (FTKs), rose
2.7% in June 2018, compared to the same month in 2017.
This continues the slowdown in air cargo growth that began earlier
in 2018. Growth for the first half of 2018 stands at 4.7%, less
than half the growth rate in 2017.
Freight capacity, measured in available freight
tonne kilometers (AFTKs), rose by 4.1% in June 2018. Capacity
growth has now outstripped demand growth in every month since
There are three main factors driving the
- The restocking cycle, during which businesses
rapidly built up inventories to meet demand, ended in early 2018.
There was a marked fall in air cargo volumes from March.
- We are now seeing a structural slowdown in
global trading conditions as indicated by the fall in the
Purchasing Managers Index (PMI) to its lowest level since 2016.
Factory export order books have turned negative in China, Japan
and the US.
- The temporary grounding of the Nippon Cargo
Airlines fleet in the second half of June exaggerated the
slow-down by shaving up to 0.5 percentage points off June growth.
"Air cargo continues to be a difficult business
with downside risks mounting," said Alexandre de Juniac, IATA’s
Director General and CEO. "We still expect about 4% growth over
the course of the year. But the deterioration in world trade is a
real concern. While air cargo is somewhat insulated from the
current round of rising tariff barriers, an escalation of trade
tension resulting in a ‘reshoring’ of production and consolidation
of global supply chains would change the outlook significantly for
the worse. Trade wars never produce winners. Governments must
remember that prosperity comes from boosting their trade, not
All regions except Africa reported a
year-on-year increase in freight volumes in June 2018, but the
slow growth in Asia-Pacific, which accounts for nearly 37% of the
entire air cargo market, dragged the global growth rate down.
Asia-Pacific airlines saw freight demand
increase by just 1.5% in June 2018 compared to the same period
last year. Capacity increased by 5.2%. The international freight
performance by the region fell to 1.1%, a 17-month low, although
this partially reflects comparisons with the strong performance in
June 2017. For the first six months of 2018 FTKs expanded by 4.6%
year-on-year, and freight volumes are expected to settle at an
annual 3-4% growth.
European airlines posted a 3.3% increase
in freight volumes in June 2018. Capacity increased by 5.4%.
Growth is being affected by a slowdown in export orders. Supply
chain bottlenecks, which are often alleviated by air freight, have
also eased. For the first half of 2018, the region expanded 4.1%
North American airlines' freight volumes
expanded 3.8% in June 2018 compared to the same period a year
earlier. International FTK performance was 5.9%, making the region
the strongest-performing market for the first time in two years.
The strong dollar and robust growth in the US economy is driving
inbound shipments. Capacity increased by 3.4%. Growth for the
first half of 2018 was 5.3%, second only to exceptional growth in
Middle Eastern carriers' freight volumes
grew 3.8% in June. This was an improvement on the May figure of
2.7% but this is well below the average five-year rate of 9.5%.
Capacity increased 4.5%. Growth for first half of 2018 was 4.3%
year-on-year, and the expectation is for volume growth to remain
modest in the months to come.
Latin American airlines experienced growth
in demand of 5.9% in June 2018 – continuing its recent run of
posting the largest increases of any region. Unusually, capacity
decreased by 5.7%. The pick-up in demand for international freight
(5.2%) slowed compared to last month, but continues to trend well
above the five-year average (1.6%). Growth for the first six
months of 2018 was 10.1%, comfortably the best performance of any
African carriers saw freight demand
contract 8.5% in June 2018 compared to the same month last year.
Capacity also fell, by 1.4%. It is difficult to be positive about
the current picture in Africa. International FTKs fell at the
fastest pace (-8.6%) for nearly nine years. Although the
year-on-year growth rate for the first half of 2018 was 3.0%, in
seasonally-adjusted terms, FTKs are trending downward at an
annualized rate of almost 20% over the past six months, and demand
conditions are weak on all the main markets to and from the