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Middle Eastern carriers .. see air cargo demand soar.

Global air freight demand falls in July

DUBAI, September 6, 2015

The global air cargo demand registered a sharp decline in July compared to last year despite a strong show by Middle Eastern carriers which saw demand expanding by 10.8 per cent and capacity up 18.3 per cent.

The air freight volumes measured in freight tonne kilometers (FTK) fell 0.6 per cent, in line with weaker global economic growth, stated the International Air Transport Association (IATA) in its report.

The decline was broad-based across all regions with the exception of Africa and the Middle East.

The Middle Eastern carriers saw the strongest growth with demand expanding by 10.8 per cent, and capacity rising 18.3 per cent.

The reason for the slightly more subdued performance in July is due to the timing of Ramadan, which traditionally gives a boost to air freight. Ramadan started in June this year whereas it took place mostly in July in 2014, said the report.

The African carriers too experienced growth in demand of 3.6 per cent, and capacity rose by 11.4 per cent.

In contrast to Latin America, the strong regional trade performance in the region has underpinned solid air freight growth, despite the underperformance of the Nigerian and South African economies, said the global aviation body in its report.

The most pronounced falls were in the Americas, where international FTK volumes were down more than five per cent compared to last year, it added.

Commenting on the results, Tony Tyler, the director general and chief executive of IATA, said: "The recent stock-market turmoil shows that investors have real fears about the strength of the global economy. And the disappointing July freight performance is symptomatic of a broader slowdown in economic growth."

"The combination of China’s continued shift towards domestic markets, wider weakness in emerging markets, and slowing global trade indicates that it will continue to be a rough ride for air cargo in the months to come," he noted.

According to him, Asia-Pacific carriers saw a fall in FTKs of 1.9 per cent in July compared to last year and capacity expanded 5.3 per cent. "The region has experienced notable declines in imports and exports during 2015, with Chinese manufacturing particularly struggling," he stated.

European carriers reported a fall in demand in June of 1.5 per cent compared to a year ago and capacity rose 3.9 per cent. Central and Eastern Europe has had an especially tough few months, with trade in this region falling around 10 per cent since the end of the first quarter.   

North American airlines too experienced a decline of 3.7 per cent year-on-year, while the capacity grew 5.4 per cent. Despite the subdued performance of the US economy in the first quarter, air freight benefited from a modal shift to air as a result of the West Coast ports strike in the US.

This impact has faded and although economic performance likely improved in the second quarter, this does not seem to be driving stronger air freight demand.

On the Latin American side, the airlines reported a fall in demand of 5.1 per cent year-on-year, and capacity expanded 3.2 per cent, said the report.  

Regional trade activity, Brazil and Argentina excepted, was very solid in the first half of 2015, but this did not feed through into stronger demand for air freight, it added.-TradeArabia News Service




Tags: demand | air freight | global |

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