Worldwide air freight traffic grew by a modest 3.1% in October, driven by e-commerce demand that compensated for weak international trade, according to the latest monthly IATA figures released today.
Air cargo, measured in freight tonne kilometers (FTKs), rose 3.1% in October 2018 compared to the same period the year before. This pace of growth was up from a 29-month low of 2.5% in September.
Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 5.4% year-on-year in October 2018. This was the eighth month in a row that capacity growth outstripped demand, the international airline association noted.
Growing international e-commerce and an upturn in the global investment cycle are supporting the growth, according to IATA. However, it said that demand continues to be negatively impacted by:
* A contraction in export order books in all major exporting nations in October;
* Longer supplier delivery times in Asia and Europe;
* Weakened consumer confidence compared to very high levels at the beginning of 2018.
“Cargo is a tough business, but we can be cautiously optimistic as we approach the end of 2018,” said Alexandre de Juniac, IATA's Director General and CEO.
“Slow but steady growth continues despite trade tensions. The growth of e-commerce is more than making up for sluggishness in more traditional markets. And yields are strengthening in the traditionally busy fourth quarter. We must be conscious of the economic headwinds, but the industry looks set to bring the year to a close on a positive note,” he concluded.
In terms of regional trends, all regions apart from Africa reported year-on-year demand growth in October 2018.
North American airlines posted the fastest growth with an increase in demand of 6.6% compared to the same period a year earlier. Capacity increased by 8.2% over the same period. The strength of the US economy and consumer spending have helped support the demand for air cargo over the past year, benefiting US carriers, IATA commented.
Asia-Pacific airlines saw demand for air freight grow by 1.9% in October 2018, compared to the same period last year. This pace of growth was relatively unchanged from the previous month. Weaker manufacturing conditions for exporters, and longer supplier delivery times particularly in China and Korea impacted the demand. “As the largest freight-flying region, carrying more than one-third of the total, the risks from rising trade tensions are disproportionately high,” IATA noted. Regional capacity increased by 4.2%.
European airlines experienced a 1.4% increase in freight demand while capacity increased by 1.9% year-on-year. Weaker manufacturing conditions for exporters, and longer supplier delivery times particularly in Germany, Europe’s largest freight flying country, impacted demand. Seasonally-adjusted international air cargo demand remained deflated in October, which could indicate the start of a broader weakening in demand, the association said.
Elsewhere, Middle Eastern airlines’ freight volumes grew by 5% and Latin American airlines saw a slight 0.3% increase, but African carriers saw freight demand decrease by 4.2% in October 2018.