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All major trading nations report falling air freight orders in July 2019: IATA

September 5, 2019: Demand for air freight, measured in freight tonne kilometers (FTKs), declined for the ninth consecutive month of year-on-year decline, contracting by 3.2 percent in July 2019, compared to the same period in 2018.

It warned that the latest round of US tariffs would likely have a negative impact sentiment and activity in the region.
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It warned that the latest round of US tariffs would likely have a negative impact sentiment and activity in the region.

September 5, 2019: Demand for air freight, measured in freight tonne kilometers (FTKs), declined for the ninth consecutive month of year-on-year decline, contracting by 3.2 percent in July 2019, compared to the same period in 2018.

The International Air Transport Association (IATA) released data for global air freight markets that continue to suffer from weak global trade and the intensifying trade dispute between the US and China.

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 2.6 percent year-on-year in July 2019. Capacity growth has now outstripped demand growth for the ninth consecutive month.

The impact of the US-China trade war and weaker manufacturing conditions for exporters in the region was seen on the Asia-Pacific airlines that saw demand for air freight contract by 4.9 percent in July 2019, compared to the same period in 2018.

The Asia-Pacific region accounts for more than 35 percent of total FTKs, making the performance a major contributor to the weak industry-wide outcome. Air freight capacity increased by 2.5 percent over the past year.

July 2019
(% year-on-year)

World share¹

FTK

AFTK

FLF
(%-pt)²

FLF
(level)³

Total Market

100.0%

-3.2%

2.6%

-2.7%

45.0%

Africa

1.6%

10.9%

17.0%

-1.8%

32.3%

Asia Pacific

35.4%

-4.9%

2.5%

-4.0%

51.9%

Europe

23.3%

-2.0%

4.2%

-3.1%

48.5%

Latin America

2.7%

3.0%

2.7%

0.1%

35.4%

Middle East

13.2%

-5.5%

0.2%

-2.7%

45.3%

North America

23.8%

-2.1%

1.6%

-1.4%

37.3%

¹% of industry FTKs in 2018 ²Year-on-year change in load factor ³Load factor level

Global trade volumes are 1.4 percent lower than a year ago and trade volumes between the US and China have fallen by 14 percent year-to-date compared to the same period in 2018.

The global Purchasing Managers Index (PMI)'s tracking of new manufacturing export orders has pointed to falling orders since September 2018. And for the first time since February 2009 all major trading nations reported falling orders.

“Trade tensions are weighing heavily on the entire air cargo industry. Higher tariffs are disrupting not only transpacific supply chains but also worldwide trade lanes. While current tensions might yield short-term political gains, they could lead to long-term negative changes for consumers and the global economy. Trade generates prosperity. It is critical that the US and China work quickly to resolve their differences,” said Alexandre de Juniac, IATA's director general and CEO.

Airlines in Asia-Pacific and the Middle East suffered sharp declines in year-on-year growth in total air freight volumes in July 2019, while North America and Europe experienced more moderate declines. Africa and Latin America both recorded growth in air freight demand compared to July last year.

Asia-Pacific airlines saw demand for air freight contract by 4.9 percent, while North American airlines saw demand decrease by 2.1 percent in July 2019, compared to the same period a year earlier.

European airlines posted a 2.0 percent decrease in freight demand and Middle Eastern airlines’ freight volumes decreased 5.5 percent in July 2019 compared to the year-ago period.

Latin American airlines experienced an increase in freight demand growth in July 2019 of 3.0 percent compared to the same period last year. African carriers posted the fastest growth of any region in July 2019, with an increase in demand of 10.9 percent compared to the same period a year earlier.

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