ITLN
Aviation

Air freight demand in Asia-Pacific contracts by 5% for August: IATA

October 9, 2019: The US-China trade war, slowdown in the Chinese economy and the temporary shutdown of Hong Kong International Airport affected the air freight demand in the Asia-Pacific region, which contracted by 5 percent in August 2019, compared to the same period in 2018.

The global air freight demand contracted by 3.9 percent in August, compared to the same period in 2018.
X
The global air freight demand contracted by 3.9 percent in August, compared to the same period in 2018.

October 9, 2019: The US-China trade war, slowdown in the Chinese economy and the temporary shutdown of Hong Kong International Airport affected the air freight demand in the Asia-Pacific region, which contracted by 5 percent in August 2019, compared to the same period in 2018.

Freight demand has contracted for the largest routes between Asia and North America, where seasonally-adjusted volumes are down almost 5 percent compared to their level in July 2018.

The Asia-Pacific region accounts for more than 35 percent of total demand, measured in freight tonne kilometers (FTKs), and this performance is the major contributor to the weak industry-wide outcome, said the International Air Transport Association (IATA) in its August 2019 data for global air freight markets.

The global air freight demand contracted by 3.9 percent in August, compared to the same period in 2018. This marks the tenth consecutive month of year-on-year decline in freight volumes, the longest period since the global financial crisis in 2008. Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 2 percent year-on-year in August 2019, outstripping demand growth for the 16th consecutive month.

Apart from the US-China trade war, weakness in some of the key economic indicators and rising political uncertainties worldwide have also contributed to global trade volumes 1 percent lower than a year ago.

“The impact of the US-China trade war on air freight volumes was the clearest yet in August. Year-on-year demand fell by 3.9 percent. Not since the global financial crisis in 2008 has demand fallen for 10 consecutive months. This is deeply concerning. And with no signs of a détente on trade, we can expect the tough business environment for air cargo to continue. Trade generates prosperity. Trade wars don’t. That’s something governments should not forget,” said Alexandre de Juniac, IATA's director general and CEO.

Regionally, Africa and Latin America both recorded growth in air freight demand compared to August last year.

Latin American airlines experienced an increase in freight demand in August 2019 of 0.1 percent compared to the same period last year and a capacity decrease of 2.9 percent. Low economic growth compounded by the US-China trade war and political instability in some countries have impacted the region’s performance. Recent currency volatility in the region’s key economies have also contributed.

African carriers posted the fastest growth of any region in August 2019, with an increase in demand of 8 percent compared to the same period a year earlier. This continues the upwards trend in FTKs that has been evident since mid-2018 and makes Africa the strongest performer for the sixth consecutive month. Capacity grew 17.1 percent year-on-year.

North American airlines saw demand decrease by 2.4 percent in August 2019, compared to the same period a year earlier. Capacity increased by 1.3 percent. Freight demand has contracted for the largest routes between Asia and North America, where seasonally-adjusted volumes are down almost 5% compared to their level in July 2018.

European airlines posted a 3.3 percent decrease in freight demand in August 2019 compared to the same period a year earlier. Weaker manufacturing conditions for exporters in Germany, softer regional economies, and ongoing uncertainty over Brexit, have impacted the recent performance. Capacity increased by 3.3 percent year-on-year.

Middle Eastern airlines’ freight volumes decreased 6.7 percent in August 2019 compared to the year-ago period. This was the sharpest drop in freight demand of any region. Capacity decreased by 0.8 percent. Escalating trade tensions, the slowing in global trade and airline restructuring have impacted the region’s performance since the fourth quarter of 2018. Economic uncertainty from oil price volatility among the region’s oil reliant markets has added additional pressure.

Next Story
Share it