African carriers register 29.4% y-o-y growth in freight volume in August
October 5, 2017: The International Air Transport Association (IATA) has released the data for global air freight markets for August 2017.
October 5, 2017: The International Air Transport Association (IATA) has released the data for global air freight markets for August 2017. As per the data, African carriers posted the largest year-on-year increase in demand of all regions in August with freight volumes growing 29.4 percent. This is a slight slowdown from July but still more than three times the five-year average pace of growth of 8.8 percent. Capacity increased by 5.9 percent over the same period. Demand has been boosted by very strong growth on the trade lanes to and from Asia which increased by more than 67 percent in the first half of the year.
IATA data shows that global air freight demand measured in freight tonne kilometers (FTKs), increased by 12.1 percent in August, compared to the same period a year ago. This was the fifth time in six months of double-digit gains on the previous yearâ€™s performance. Demand is growing at exceptional speed when compared to the five-year average growth rate of 4.4 percent.
Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 4.7 percent year-on-year in August 2017. Demand growth continues to significantly outstrip capacity growth, which is positive for industry load factors, yields, and financial performance.
The strong performance of air freight demand corresponds with the pick-up in global trade. World trade volumes grew 4.2 percent in the first seven months of 2017 compared to 2016, their strongest performance since 2011. This is consistent with rising export orders, which are currently at their highest levels since March 2011, and upbeat business confidence indicators.
Signs that the peak of the cyclical growth period may be near also continued. The global inventory-to-sales ratio in the US, for example, has stopped falling. This usually means that re-stocking to meet demand (which gives air freight a boost), is ending.
The outlook for air freight remains strong. With several months of double-digit growth in 2017, the current IATA forecast of 7.5 percent growth in air freight demand for 2017 appears to have significant upside potential even if we are approaching a cyclical peak.
"Air cargo had another stellar performance in August. Demand for air cargo grew at a double-digit rate for the fourth month in a row - outperforming demand for passenger travel for the fourth consecutive month. Rapid growth in cargo demand means that cargo capacity is now growing in response to real cargo demand rather than automatically as carriers responded to passenger demand. The pace of capacity growth, however, has slowed even as freighter fleets are being utilised more intensely. Overall, that should be good news for much-beleaguered cargo yields," said Alexandre de Juniac, director general and CEO, IATA.
Â¹% of industry FTKs in 2016 Â²Year-on-year change in load factor Â³Load factor level
All regions except for Latin America posted double-digit freight growth in August 2017.
Asia-Pacific airlinesâ€™ freight volumes grew 11.3 percent and capacity increased by 5.7 percent. Demand growth was strong on all the major routes to, from and within Asia-Pacific.
North American carriers posted an increase in freight volumes of 11.7 percent and a capacity increase of 3.7 percent. Data from the US Census Bureau shows a 12.7 percent increase in air imports to the US in the first seven months of 2017
European airlines posted an 11.8 percent increase in freight demand in August 2017 and a capacity increase of 5.1 percent. Double-digit growth in the international market has now been recorded in 10 of the past 12 months.
Middle Eastern carriersâ€™ year-on-year freight volumes increased 14.1 percent in August 2017 and capacity increased 2.8 percent. The strong pickup in demand largely reflects favourable comparisons to a short-lived weak patch in demand in 2016 rather than acceleration in the current demand trend.
Latin American airlines experienced a growth in demand of 8.5 percent and capacity increased by 9.3 percent compared to the same period in 2016. International freight volumes increased by 9.5 percent over the same period.