Middle Eastern airlines’ freight volumes contracted 4.5 per cent in January 2019 compared to the same period last year, and the capacity increased by 4.1 per cent, according to figures released by the International Air Transport Association (Iata).

The Middle East’s seasonally-adjusted international air cargo demand, which trended upwards for the previous three months helped by stronger trade to/from Europe and Asia, has started to decline, added the report.

The global air freight markets showed that demand, measured in freight tonne kilometers (FTKs), decreased 1.8 per cent in January 2019, compared to the same period in 2018. This was the worst performance in the last three years, it said.

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 4.0 per cent year-on-year in January 2019. This was the eleventh month in a row that capacity growth outstripped demand growth.

Demand for air cargo continues to face significant headwinds. Global economic activity and consumer confidence have weakened. And the Purchasing Managers Index (PMI) for manufacturing and export orders has indicated falling global export orders since September 2018.

Alexandre de Juniac, director general and chief executive officer, Iata, said: “Air cargo markets contracted in January. This is a worsening of a weakening trend that started in mid-2018. Unless protectionist measures and trade tensions diminish there is little prospect of a quick re-bound.”

Only two of six regions reported year-on-year demand growth in January 2019 – North America and Africa. Asia-Pacific, Europe and the Middle East all contracted, while Latin America was flat.

Asia-Pacific airlines saw demand for air freight shrink by 3.6 per cent in January 2019, compared to the same period in 2018.

Weaker manufacturing conditions for exporters in the region, ongoing trade tensions and a slowing of the Chinese economy impacted the market. Capacity increased by 4.1 per cent.

North American airlines posted the fastest growth of any region for the eighth consecutive month in January 2019, with an increase in demand of 3.3 per cent compared to the same period a year earlier.

Capacity increased by 5.0 per cent. The strength of the US economy and consumer spending have helped support the demand for air cargo over the past year, benefiting US carriers.

European airlines experienced a contraction in freight demand of 3.1 per cent in January 2019 compared to a year ago. Capacity increased by 2.8 per cent year-on-year. Weaker manufacturing conditions for exporters, and shorter supplier delivery times particularly in Germany, one of Europe’s key export markets, impacted demand. Trade tensions and uncertainty over Brexit also contributed to a weakening in demand.

Latin American airlines’ freight demand was flat (0.0 per cent) in January 2019 versus last year. Despite the economic uncertainty in the region, a number of key markets are performing strongly. Freight traffic within South America and between Central and South America grew at a double-digit rate in January. And demand on routes between North and South America also performed well. Capacity decreased by 0.7 per cent.

African carriers saw freight demand increase by 1.0 per cent in January 2019, compared to the same month in 2018. Capacity grew 8.2 per cent year-on-year. Seasonally-adjusted air cargo demand has now trended upwards for six months. And while seasonally-adjusted international freight volumes are lower than their peak in mid-2017, they are still 35 per cent higher than their most recent trough in late-2015. 

The challenges and opportunities facing the air cargo industry will be discussed at the 13th World Cargo Symposium which will gather the air cargo industry in Singapore, to be held on March 12 to 14. – TradeArabia News Service