Demand for Air Cargo Picks up in June - Global Trade Magazine
  August 10th, 2016 | Written by

Demand for Air Cargo Picks up in June

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  • Air cargo demand in June rose 4.3 percent year-on-year.
  • Increase in air cargo demand in June was the fastest pace of growth in 14 months.
  • Air cargo markets have seen several false starts in recent years.

The International Air Transport Association (IATA) released data for global air freight demand in June 2016 showing a rise in freight ton kilometers (FTK) of 4.3 percent year-on-year. This was the fastest pace of growth in 14 months. Freight capacity measured in available freight tonne kilometers (AFTK) increased by 4.9 percent year-on-year, keeping yields under downward pressure.

Freight demand increased year-on-year in June across all regions with the exception of Latin America which recorded a 9.8 percent decrease, compared to the same period last year. The Middle East and Europe posted the fastest demand growth in June with year-on-year increases of 8.0 percent and 5.1 percent respectively.

“June saw an improvement in demand for air freight. That’s good news. However, we cannot read too much into one month’s performance,” said Tony Tyler, IATA’s director general and CEO. “Air cargo markets have been in the doldrums for several years during which there were several false starts on indications for improvement. We will continue watching developments closely, keeping in mind that the air freight business environment is fragile. Global economic growth remains sluggish, world trade volumes continue to trend downwards and the industry faces heightened uncertainty in the aftermath of the Brexit vote.”

Regional Performance

Asia-Pacific airlines reported a 3.5 percent increase in demand for air cargo in June compared to last year, while capacity expanded 3.6 percent. The Asia-Pacific air freight market has been improving in recent months, most notably in the large intra-Asia market. But freight volumes from emerging Asia continue to face headwinds from weak trade in the region and globally.

North American carriers saw freight volumes expand 4.3 percent in June 2016 compared to the same period last year. Capacity increased 4.0 percent. International freight volumes continue to suffer from the strength of the U.S. dollar which has kept the U.S. export market under pressure.

European airlines witnessed a 5.1 percent increase in freight volumes and a 4.9 percent increase in capacity in June 2016. The positive European performance corresponds with signs of an increase in export orders in Germany over the last few months. Seasonally adjusted freight results for Europe are now trending upwards.

Middle Eastern carriers posted the largest increase in freight volumes of all regions for the sixteenth consecutive month in June, 8.0 percent year on year. Capacity increased by 8.7 percent. Although the leader in market growth, the Middle East’s international freight growth rate—6.5 percent—for the first six months of 2016 is less than half the 14.3 percent average growth for the same period in 2015.

Latin American airlines reported a decline in demand of 9.8 percent and a decrease in capacity of 2.6 percent. The region continues to be blighted by weak economic and political conditions, particularly in the region’s largest economy, Brazil.

African carriers recorded 0.4 percent freight growth in June 2016 compared to the same period last year. African airlines’ capacity surged by 19.9 percent year-on-year on the back of long-haul expansion, continuing the trend seen since December 2015.

Overall freight traffic market shares by region of carriers in terms of FTK are: Asia-Pacific 38.9 percent, Europe 22.3 percent, North America 20.5 percent, Middle East 14.0 percent, Latin America 2.8 percent, and Africa 1.5 percent.

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