Air Freight Demand Growth Continues Slowdown
Demand growth for global air freight continued to fall in July, with the month showing the slowest rate of growth for two years.
The International Air Transport Association’s monthly report showed a 2.1 percent increase in freight tonne kms in July compared to the same period in 2017. IATA said the month’s growth was well below the five-year average of 5.1 percent.
Cargo carriers added 3.8 percent more freight capacity in July, measured in available freight tonne kms. The resulting freight load factor fell by 0.7 percentage points, the fourth time in five months that capacity growth outstripped demand growth.
Despite the slowdown, IATA Director General Alexandre de Juniac said “We still expect 4 percent growth over the course of the year, however the downside risk has increased. The tariff war and increasingly volatile trade talks between the world’s two largest trading nations - China and the US - are rippling across the global economy putting a drag on both business and investor sentiment. Trade wars only produce losers.”
All regions saw increased freight demand except Africa which contracted by 8.3 percent. The Middle East grew by the fastest amount in July, 5.4 percent, with Latin America returning a 3.0 percent boost. Europe and North America both saw a 2.6 percent increase in demand.
The Middle East topped the capacity growth table with a 6.3 percent increase, with Europe on 4.4 percent and North America on 4.0 percent. Latin America took 7.8 percent capacity out of the market, boosting its load factor by 3.6 percentage points.