Seasonally-adjusted international freight volumes have maintained their solid growth, says Iata
Middle East airline freight volumes continue to find strong lift
Middle East carriers maintained their strong upward trend in freight volumes in July, according to the International Air Transport Association (Iata) on Wednesday.
Regionally, freight volumes increased 9.3 per cent year on year although capacity slipped slightly by 0.4 per cent.
Seasonally-adjusted international freight volumes have maintained their solid growth, Iata said. However, amid strong competition from other regions' carriers particularly on the Asia-Europe route, the Middle East carriers are not seeing as strong a pick-up in the seasonally adjusted traffic trend as other regions' airlines, although Iata said all regions posted robust freight growth in July 2017.
Growth in air cargo demand is consistent with an uptick in global trade, rising export orders and upbeat business confidence indicators, the agency said. There are, however, signs that demand growth for air freight may be nearing a peak. Seasonally-adjusted air freight volumes were flat in June and fell in July; and the global inventory-to-sales ratio has stabilised. Air cargo often sees a boost in demand at the beginning of an economic upturn as companies look to restock inventories quickly. This tapers as inventories are adjusted to new demand levels.
“July was a strong month for air cargo with double-digit growth. And for the third consecutive month demand for air freight grew at a faster pace than demand for air travel. While the outlook for the rest of the year remains positive, there are signs that the cyclical growth period may be nearing a peak,” said Alexandre de Juniac, Iata’s director general and chief executive.
Asia-Pacific airlines’ freight volumes grew 11 per cent in July compared with the same period a year earlier and capacity increased by 6.3 per cent. Demand growth was robust on all the major routes to, from and within the region, Iata said. Seasonally-adjusted international freight volumes fell slightly in July but remain more than 3 per cent above those reached following the 2010 post-global financial crisis bounce-back.
European airlines posted a 12.1 per cent increase in freight demand and a capacity increase of 5.5 per cent. Double-digit growth in international demand has now been recorded in nine out of the past 11 months bolstered by strong demand on the Europe-Asia market, according to Iata. While export orders remain strong the recent strengthening of the euro may begin to weigh upon the region’s exporters, it said.
African carriers posted the largest year-on-year increase in demand of all regions in July with freight volumes growing 33.7 per cent - the second-fastest monthly rise in seven years. Capacity increased by 4.5 per cent over the same time period. Demand has been boosted by very strong growth on the trade lanes to and from Asia which increased 80 per cent year-on-year in June (latest available data) and by 65 per cent in the first half of the year, according to the aviation group
North American carriers posted an increase in freight volumes of 11.9 per cent in July, and a capacity increase of 1.1 per cent. The strength of the US dollar has boosted the inbound freight market over the past few years but its decline since the start of the year is likely to help rebalance trade flows, Iata said.
Global air freight markets show that demand, measured in freight tonne kilometres, increased by 11.4 per cent in July compared to the same period a year ago. This was the fourth time in five months that double-digit annual growth was recorded, Iata said. July’s year-on-year increase in demand is nearly four times higher than the ten year average growth rate of 3.1 per cent.
Freight capacity, measured in available freight tonne kilometres, grew by 3.7 per cent year-on-year.
"Demand growth continues to significantly outstrip capacity growth, which is positive for airline yields and the industry’s financial performance" Iata said.