IATA's full-year 2018 data for global air
freight markets shows that demand, measured in freight tonne
kilometers (FTKs) grew by 3.5% compared to 2017, significantly
lower than the extraordinary 9.7% growth recorded in 2017.
Freight capacity, measured in available freight
tonne kilometers (AFTKs), rose by 5.4% in 2018, outpacing annual
growth in demand. This exerted downward pressure on the load
factor but yields proved resilient.
Air cargo’s performance in 2018 was sealed by a
softening in demand in December. Year-on-year, December demand
decreased by 0.5%. This was the worst performance since March
2016. Freight capacity, however, grew by 3.8%, the tenth
month in a row that year-on-year capacity growth outstripped
International e-commerce grew in 2018 which
was a positive factor for the year. Yet, there was a softening of
several key demand drivers:
- The restocking cycle, during
which businesses rapidly built up inventories to meet demand,
ended in early 2018;
- Global economic activity weakened;
The export order books of all major exporting nations, with the
exception of the US, contracted in the second half of 2018; and
Consumer confidence weakened compared to very high levels at the
beginning of 2018.
“Air cargo demand lost momentum towards
the end of 2018 in the face of weakening global trade, sagging
consumer confidence and geopolitical headwinds. Still, demand grew
by 3.5% compared to 2017. We are cautiously optimistic that demand
will grow in the region of 3.7% in 2019. But with the persistence
of trade tensions and protectionist actions by some governments
there is significant downside risk. Keeping borders open to people
and to trade is critical,” said Alexandre de Juniac, IATA’s
Director General and CEO. “To attract demand in new market
segments, the air cargo industry must improve its value
proposition. Enabling modern processes with digitalization will
help build a stronger foothold in e-commerce and the transport of
time- and temperature-sensitive goods such as pharmaceuticals and
Airlines in all regions with the exception of Africa reported an
annual increase in demand in 2018.
posted the weakest growth of any region in December 2018 with a
decrease in demand of 4.5% compared to the same period a year
earlier. Capacity increased by 2.6%. The weaker performance in
December contributed to growth in freight demand of only 1.7% in
2018 compared to 2017. Annual capacity increased 5.0%. The weaker
performance of Asia-Pacific carriers in 2018 largely reflects a
slowing in demand for exports from the region’s major exporters
(China, Japan and Korea). Signs of a moderation in economic
activity in China and an escalation of trade tensions continue to
pose a downside risk to air cargo in Asia-Pacific.
American airlines posted the fastest growth of any region for the
seventh consecutive month in December 2018 with an increase in
demand of 2.9% compared to the same period a year earlier.
Capacity increased by 4.5%. This contributed to an annual growth
in demand in 2018 of 6.8%, matching the rate of capacity increase.
The strength of the US economy and consumer spending have helped
support the demand for air cargo over the past year, benefiting US
European airlines posted a 1.9% year-on-year
increase in freight demand in December 2018 and a capacity rise of
3.7%. The improved performance in December contributed to an
annual growth in demand for air cargo of 3.2% in 2018. Capacity
increased by 4.3% in the same year. Weaker manufacturing
conditions for exporters, particularly in Germany, one of Europe’s
key export markets, along with mixed economic indicators impacted
demand in 2018.
Middle Eastern carriers’ freight volumes
increased 0.1% year-on-year in December and capacity increased
4.5%. This contributed to an annual increase in demand of 3.9% in
2018 – the third fastest growth rate of all the regions. Annual
capacity increased 6.2%. The region continues to be affected by
Latin American airlines experienced a
decrease in year-on-year demand of 0.1% in December after three
months of positive growth. Capacity increased by 6.0%. Despite a
decrease in demand, it’s worth noting that the within South
America market continues to perform strongly, with international
demand up almost 20% year-on-year. Annual growth in freight demand
among Latin America carriers in 2018 increased by 5.8% - the
second fastest of all regions. Annual capacity increased 3.4% in
African carriers’ saw freight demand decrease by
2.2%, in December 2018, compared to the same month in 2017. This
was significantly less than the 9.4% decrease the previous month.
Capacity increased by 4.9% year-on-year. It’s worth noting that seasonally-adjusted international freight volumes, despite being
7.7% lower than their peak in mid-2017, are still 50% higher than their most recent trough in late-2015. Annual growth in freight
demand among Africa carriers in 2018 decreased by 1.3% and capacity grew by 1%.