IATA’s latest data for global air freight
markets shows that demand, measured in freight tonne kilometers
(FTKs), increased by 12.1% in August 2017, compared to the same
period a year ago.
This was the fifth time in six months of
double-digit gains on the previous year’s performance. Demand is
growing at exceptional speed when compared to the five-year
average growth rate of 4.4%.
Freight capacity, measured in available freight
tonne kilometers (AFTKs), grew by 4.7% year-on-year in August
2017. Demand growth continues to significantly outstrip capacity
growth, which is positive for industry load factors, yields, and
The strong performance of air freight demand
corresponds with the pick-up in global trade. World trade volumes
grew 4.2% in the first seven months of 2017 compared to 2016,
their strongest performance since 2011. This is consistent with
rising export orders, which are currently around their highest
levels since March 2011, and upbeat business confidence
Signs that the peak of the cyclical growth
period may be near also continue. The global inventory-to-sales
ratio in the US, for example, has stopped falling. This usually
means that re-stocking to meet demand (which gives air freight a
boost), is ending.
The outlook for air freight remains strong. With
several months of double-digit growth in 2017, the current IATA
forecast of 7.5% growth in air freight demand for 2017 appears to
have significant upside potential even if we are approaching a
“Air cargo had another stellar performance in
August,” said Alexandre de Juniac, IATA’s Director General and
CEO. “Demand for air cargo grew at a double-digit rate for the
fourth month in a row – outperforming demand for passenger travel
for the fourth consecutive month. Rapid growth in cargo demand
means that cargo capacity is now growing in response to real cargo
demand rather than automatically as carriers responded to
passenger demand. The pace of capacity growth, however, has slowed
even as freighter fleets are being utilized more intensely.
Overall, that should be good news for much beleaguered cargo
All regions with the exception of Latin America
posted double digit freight growth in August 2017.
Asia Pacific airlines’ freight volumes grew
11.3% in August 2017 compared to the same period a year earlier,
and capacity increased by 5.7%. Demand growth was strong on all
the major routes to, from and within Asia Pacific, consistent with
strong export order books for the region’s manufacturers.
Seasonally-adjusted international freight volumes increased in
August after a slight dip in July and are now almost 6% above the
volumes reached following the 2010 post-global financial crisis
North American carriers posted an increase
in freight volumes of 11.7% in August 2017, and a capacity
increase of 3.7%. Seasonally-adjusted international freight
volumes remain strong. The strength of the US dollar has boosted
the inbound freight market over the past few years. Data from the
US Census Bureau shows a 12.7% increase in air imports to the US
in the first seven months of 2017, compared to a slower rise in
export orders of 5.8%. Despite the US dollar remaining strong by
historical standards, its slight decline since the start of the
year is expected to start to help rebalance trade flows.
European airlines posted an 11.8% increase
in freight demand in August 2017 and a capacity increase of 5.1%.
Double-digit growth in international demand has now been recorded
in 10 of the past 12 months. Concerns that the recent
strengthening of the euro may have affected the regions’ exporters
have not materialized. In fact German manufacturers’ export orders
are growing at their fastest pace since early-2010.
Middle Eastern carriers’ year-on-year
freight volumes increased 14.1% in August 2017 and capacity
increased 2.8%. The strong pick-up in demand largely reflects
favorable comparisons to a short-lived weak patch in demand in
2016 rather than an acceleration in the current demand trend.
Seasonally-adjusted international freight volumes have maintained
their solid upward trend. However, amid strong competition from
other region’s carriers particularly on the Asia-Europe route, the
Middle East carriers are not seeing as strong a pickup in the
seasonally-adjusted traffic trend as other region’s carriers.
Latin American airlines experienced a
growth in demand of 8.5% in August 2017 and capacity increased by
9.3% compared to the same period in 2016. International freight
volumes increased by 9.5% over the same period. This is close to a
seven-year high and well above the five-year average rate of
-0.1%. Seasonally-adjusted international freight volumes grew
strongly for the sixth consecutive month in August, however they
remained 4% lower than their peak in 2014. Despite this,
seasonally-adjusted demand has been trending upwards at an
annualized rate of about 20% over the past six months. The pick-up
in demand reflects signs of economic recovery in the region’s
largest economy, Brazil.
African carriers posted the largest
year-on-year increase in demand of all regions in August 2017 with
freight volumes growing 29.4%. This is a slight slowdown from July
but still more than three times the five-year average pace of
growth of 8.8%. Capacity increased by 5.9% over the same period.
Demand has been boosted by very strong growth on the trade lanes
to and from Asia which increased by more than 67% in the first
half of the year.