Home » Aviation, Breaking News » 2016 air cargo expands to almost twice the average in 5 years

Global air freight demand, measured in freight tonne kilometers (FTKs), grew by 3.8% in 2016 compared to 2015, outperforming forecasts and nearly doubling the industry’s average growth rate of 2.0% over the last five years, according to the International Air Transport Association (IATA).

Freight capacity, measured in available freight tonne kilometers (AFTKs), increased by 5.3% in 2016.

All regions, except Latin America, experienced positive freight growth in 2016. Carriers in Europe accounted for almost half of the total annual increase in demand, said IATA.

After a weak start to 2016, global freight volumes recovered in the second half of the year, it added. A strong peak season, an increase in the shipment of silicon materials, and a turnaround in new export orders contributed to the later uptick in demand. The early timing of the Lunar New Year, in January 2017, may also have helped push demand higher in December.

“In terms of demand, 2016 was a good year for air cargo. That was boosted by solid year-end performance. Looking ahead, strong export orders are good news. But there are headwinds. The most significant is stagnant world trade which also faces the risk of protectionist measures. Governments must not forget that trade is a powerful tool for growth and prosperity,” said Alexandre de Juniac, IATA’s director general and CEO.

For Asia-Pacific carriers, demand in freight volumes grew 9.8% in December 2016 compared to the same period in 2015 and capacity grew by 5.7%. This contributed to a growth in freight demand of 2.1% in 2016 compared to 2015, slightly below the 2.3% increase seen the previous year. However, seasonally adjusted volumes are now back to the levels reached in 2010 during the post-global financial crisis bounce-back. The increase in demand is captured in the positive outlook from business surveys in the region. Capacity in the region increased 3.6% in 2016.

North American airlines saw freight demand increase by 3.7% in December 2016 year-on-year and capacity decrease 1.4%. This contributed to modest annual growth in 2016 of 2.0%, up from 1.3% the previous year. Capacity grew by 3.4% in the 2016 calendar year. The strength of the U.S. dollar continued to boost its inbound market but kept the export market under pressure.

European airlines posted a 16.4% year-on-year increase in freight demand in December and a capacity rise of 5.9%. The healthy results helped boost cargo volumes for the 2016 calendar year by 7.6%—the  largest increase of all regions, and accounting for almost half of the total global annual increase in freight demand. The seasonally adjusted growth trend is strong and corresponds with the sustained increase in export orders in Germany and the ongoing weakness in the Euro. Capacity in the region increased by 6.7% in the 2016 calendar year.

Middle Eastern carriers’ freight volumes increased 11.2% year-on-year in December and capacity increased 5.9%. This contributed to an annual increase in demand of 6.9% in 2016—the second fastest growth rate of all the regions. However this was the region’s slowest pace of growth since 2009 and well below the 12% average annual rate seen over the past decade. The slowdown in growth is mainly due to weak freight volumes between the Middle East and Asia, and the Middle East and Europe.

Latin American airlines experienced a demand contraction of 1% in December 2016 compared to the same period in 2015 and a decrease in capacity of 7.9%. The drop in demand was reflected in the region’s 2016 overall performance—a 4.2% decrease in freight volumes. The region continues to be blighted by weak economic and political conditions, particularly in the largest economy, Brazil. Capacity in the region decreased by 2.0% in 2016 compared to 2015.

African carriers’ had the second fastest growth in year-on-year freight volumes, up 13.6% in December 2016 and a capacity increase of 5.3%. This contributed to an annual growth in freight demand of 3.1% in 2016, down from 4.5% in 2015. However, capacity surged by 25.5% in the 2016 calendar year on the back of long-haul expansion, causing a fall in the freight load factor.

Photo: Bill Word

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