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  December 10th, 2016 | Written by

Fastest Air Cargo Growth in 18 Months

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  • Global air freight markets will end 2016 on a high note.
  • Strong growth in crossborder ecommerce and pharmaceutical flows contributed to air cargo boost.
  • Black Friday and Cyber Monday contributed to the increased air cargo demand peak.

The International Air Transport Association (IATA) released data for global air freight markets in October 2016 showing that demand, measured in freight tonne kilometers (FTKs), rose 8.2 percent year-on-year in October. This was the fastest pace of growth seen in 18 months.

Freight capacity, measured in available freight tonne kilometers (AFTKs), increased 3.6 percent over the same period.

“Global air freight markets look set to end 2016 on a high note,” said Alexandre de Juniac, IATA’s Director General and CEO. “It remains to be seen how long this growth trend will endure after the year-end peak period and we still face headwinds from weak global trade. But there are some encouraging signs.”

The 2016 peak season for air cargo has been stronger than expected, de Junaiac noted, and purchasing managers are reporting a pick-up in new export orders. “So we will enter 2017 propelled by some much-needed positive momentum,” he said.

Some one-off factors are likely impacting October’s positive results. There was a possible modal shift to air cargo following the collapse of the Hanjin Shipping Company in August. There could also have been some last-minute reliance on air transport as companies exercised caution in ordering as a result of weak market conditions earlier in the year.

Structural market shifts are also likely underpinning a portion of the stronger performance, according to IATA, including strong growth in crossborder ecommerce and pharmaceutical flows. Preparation for the increasing popularity of sales events such as Black Friday and Cyber Monday may also have contributed to the increased demand peak.

“The drivers of stronger growth are sending a major signal for change to the air cargo industry,” said de Juniac. “Whether it is ecommerce or the trade in pharmaceuticals, shippers are demanding more than current paper processes can support. The shift to e-freight is more critical than ever.

Airlines in all regions except Latin America reported an increase in year-on-year demand in October. However results continued to vary considerably.

Asia-Pacific airlines saw demand in freight volumes both from within Asia and on routes to and from the region increase in October 2016.

North American carriers’ freight volumes expanded 3.7 percent in October 2016 compared to the same period last year, and international freight volumes increased by 7.2 percent in October, their fastest pace since the disruption at US seaports in February last year. Seasonally-adjusted freight volumes are back to the levels reached since the post-global financial crisis bounce-back in 2010. U.S. exports continue to suffer from the strength of the U.S. dollar which has kept the U.S. export market under pressure.

European airlines posted the largest increase in freight demand of all regions in October, 13.4 percent year on year. Middle Eastern carriers saw air freight demand increase by 9.2 percent.

Latin American airlines experienced a demand contraction of 0.1 percent in October 2016, while African carriers’ freight demand increased by 7.4 percent. Capacity surged by 24.7 percent due to long-haul expansion, especially by Ethiopian Airlines. International freight demand for African airlines slowed in October, but still remained robust at 7.7 percent year-on-year.