Middle Eastern carriers recorded the world’s highest increase in year-on-year growth in freight volumes at 14.1 per cent in August while capacity increased 2.8 per cent, said a new report from the International Air Transport Association (Iata).

The strong pick-up in demand largely reflects favourable comparisons to a short-lived weak patch in demand in 2016 rather than an acceleration in the current demand trend, Iata said.

Seasonally-adjusted international freight volumes have maintained their solid upward trend. However, amid strong competition from other region’s carriers particularly on the Asia-Europe route, the Middle East carriers are not seeing as strong a pickup in the seasonally-adjusted traffic trend as other region’s carriers.

African carriers posted the largest year-on-year increase in demand of all regions in August 2017 with freight volumes growing 29.4 per cent. This is a slight slowdown from July but still more than three times the five-year average pace of growth of 8.8 per cent.

Globally, air freight markets showing that demand, measured in freight tonne kilometres (FTKs), increased by 12.1 per cent in August 2017, compared to the same period a year ago. This was the fifth time in six months of double-digit gains on the previous year’s performance. Demand is growing at exceptional speed when compared to the five-year average growth rate of 4.4 per cent.

Freight capacity, measured in available freight tonne kilometres (AFTKs), grew by 4.7 per cent 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 per cent 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 around their highest levels since March 2011, and upbeat business confidence indicators.

Signs that the peak of the cyclical growth period may be near also continue. 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 per cent 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,” said Alexandre de Juniac, Iata’s director general and CEO.  

“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 utilized more intensely. Overall, that should be good news for much beleaguered cargo yields.”

Latin American airlines experienced a growth in demand of 8.5 per cent in August 2017 and capacity increased by 9.3 per cent compared to the same period in 2016. International freight volumes increased by 9.5 per cent over the same period.

Asia-Pacific airlines’ freight volumes grew 11.3 per cent in August 2017 compared to the same period a year earlier, and capacity increased by 5.7 per cent.

North American carriers posted an increase in freight volumes of 11.7 per cent in August 2017, and a capacity increase of 3.7 per cent. Seasonally-adjusted international freight volumes remain strong.

European airlines posted an 11.8 per cent increase in freight demand in August 2017 and a capacity increase of 5.1 per cent. Double-digit growth in international demand has now been recorded in 10 of the past 12 months. – TradeArabia News Service