The global air freight sector has shown varied growth and declines between 2012 and 2016, registering an overall compound annual growth rate (CAGR) of 0.7 percent between 2012 and 2016 to reach a value of $101.3 billion, according to data from the research company MarketLine.

MarketLine’s latest report shows that the air freight sector’s growth is primarily driven by the Middle East and Asia-Pacific (APAC) as a result of increased manufacturing. With an under-developed internal market, opportunity for future growth is also possible, particularly in larger countries like China and India.

“The International Air Transport Association suggested a global price drop per Freight Ton Kilometer in 2016,” said Paul Todd, Analyst for MarketLine. “As such, a global decrease in value was identified in 2016 despite volume continuing to climb. While the price of crude oil has decreased, allowing a certain amount of breathing room for freight companies, the effect of overcapacity has suppressed freight yields and forced rates downwards.”

The global market is forecast to grow with a CAGR of 3.2 percent between 2016 and 2021 to reach a value of $118.7 billion, aided by increased infrastructure in the APAC region as well as by the advantages and cross-relation between different freight modes. While volume growth has slowed in 2015 and 2016, new technology in the industry is set to increase volumes at a steady rate.

“Despite a positive outlook for the air freight sector, companies must always consider the threat from alternative freight methods,” said Todd. “The advantages to the customer must be sufficient to ensure healthy growth in this sector.

“Oversupply or increased competition may be potential threats,” he added, “but the recent bankruptcy of Hanjin, a leading marine freight company, could be positive for the air freight sector as its players may pick up some trade from consumers who have lost confidence in marine transport.”