All regions, including Asia-Pacific, reported an increase in air freight demand in February 2018, but the robust outlook for the rest of 2018 faces some potentially strong headwinds, including rising protectionism, said the International Air Transport Association (IATA).
Traffic results for February showed global air freight markets increasing demand by 6.8% compared to the same period last year.
Adjusting for the potential Lunar New Year distortions by combining growth in January 2018 and February 2018, demand increased by 7.7%, the strongest start to a year since 2015, said IATA.
Freight capacity grew by 5.6% year-on-year in February 2018. “Demand growth outstripped capacity growth for the 19th month in a row, which is positive for airline yields and the industry’s financial performance,” IATA added.
“The continued growth in air cargo demand is consistent with ongoing robust global trade flows. There are, however, signs that the best of the upturn for air freight has passed. Demand drivers for air cargo are moving away from the highly supportive levels seen last year.”
It noted that in recent months the Purchasing Managers’ Index (PMI) for manufacturing and export orders has softened in a number of key exporting nations including Germany, China and the U.S. And the seasonally adjusted demand for air cargo which rose at a double-digit annualized rate for much of 2017 is now trending at 3%.
“Demand for air cargo continues to be strong, with 6.8% growth in February. The positive outlook for the rest of 2018, however, faces some potentially strong headwinds, including escalation of protectionist measures into a full-blown trade war,” said Alexandre de Juniac, IATA’s director general and CEO.
In regional terms, Asia-Pacific airlines saw demand in freight volumes grow 6.5% in February 2018 and capacity increase by 7.2%, compared to the same period in 2017. The upward trend in seasonally adjusted volumes has returned, with volumes currently trending upwards at an annualized pace of between 6.0% and 7.0%.
As the largest freight-flying region, carrying close to 37% of global air freight, the risks from protectionist measures impacting the Asia-Pacific region are disproportionately high.
North American airlines’ freight volumes expanded 7.3% in February 2018 compared to the same period a year earlier, and capacity increased by 4.1%. The weakening of the U.S. dollar over the past year has helped boost demand for air exports.
European airlines posted a 5.7% increase in freight volumes in February 2018. This was almost half the rate of the previous month and the slowest of all regions. The strength of the Euro and the risks from protectionist measures may impact the European freight market which has benefited from strong export orders, particularly in Germany, in recent years.
Middle Eastern carriers’ year-on-year freight volumes increased 7.4% in February 2018 and capacity increased 7.6%. Seasonally adjusted freight volumes continue to trend upwards; however, they have slowed to an annualized rate of 4% since late 2017, reflecting the weak conditions on the routes to and from Europe.
Latin American airlines experienced growth in demand of 8.7% in February 2018 and a capacity increase of 6.9%. The pick-up in demand over the last 18 months comes alongside signs of economic recovery in the region’s largest economy, Brazil.
African carriers’ saw freight demand increase by 15.9% in February 2018 compared to the same month last year—the largest increase of any region. The increase was helped by very strong growth on the trade lanes to and from Asia driven by ongoing foreign investment flows into Africa.
Photo: Alessandro Lukas
