Middle Eastern airlines’ freight volumes decreased 6.7 per cent in August compared to the year-ago period - the sharpest drop in freight demand of any region, new data showed.
According to data released by the International Air Transport Association (Iata), capacity decreased by 0.8 per cent. Escalating trade tensions, the slowing in global trade and airline restructuring have impacted the region’s performance since the fourth quarter of 2018. Economic uncertainty from oil price volatility among the region’s oil-reliant markets also added additional pressure.
Airlines in Asia-Pacific also suffered sharp declines (down 5 per cent) in year-on-year growth in total air freight volumes in August, while North America (down 2.4 per cent) and Europe (down 3.3 per cent) experienced more moderate declines. Africa (up 8 per cent) and Latin America (up 0.1 per cent) both recorded growth in air freight demand compared to August last year.
The data for global air freight markets showed that demand, measured in freight tonne kilometres (FTKs), decreased by 3.9 per cent in August, compared to the same period in 2018, marking the 10th consecutive month of year-on-year decline in freight volumes, the longest period since the global financial crisis in 2008.
Global freight capacity, measured in available freight tonne kilometres (AFTKs), rose by 2 per cent year-on-year in August. Capacity growth has now outstripped demand growth for the 16th consecutive month.
Air cargo continues to face strong headwinds from the intensifying trade war between the US and China, as well as weakness in some of the key economic indicators and rising political uncertainties worldwide. Global trade volumes are 1 per cent lower than a year ago, data showed.
Trade in emerging countries has been underperforming that of advanced nations throughout most of 2019. This is due to higher sensitivity of the emerging economies to trade tensions, rising political instability and sharp currency depreciation in some of the key emerging markets, it showed.
Global export orders continue to fall. The global Purchasing Managers Index (PMI) remains in contraction territory. Its tracking of new manufacturing export orders has pointed to falling orders since September 2018. And for the second month in a row, all major trading nations reported falling orders.
“The impact of the US-China trade war on air freight volumes was the clearest yet in August. Year-on-year demand fell by 3.9 per cent. Not since the global financial crisis in 2008 has demand fallen for 10 consecutive months. This is deeply concerning. And with no signs of a détente on trade, we can expect the tough business environment for air cargo to continue. Trade generates prosperity. Trade wars don’t. That’s something governments should not forget,” said Alexandre de Juniac, Iata's director general and CEO. - TradeArabia News Service