Middle Eastern carriers’ freight volumes grew 2.4 per cent in May compared to the same period last year. However, there was a significant deceleration in demand compared to the 6.9 per cent growth seen in the previous month, said a report.

According to data released by the the International Air Transport Association (Iata), the Middle East’s decrease mainly reflects developments from a year ago rather than a substantive change in the current freight trend. Seasonally-adjusted freight volumes continue to trend upwards at a comparatively modest pace by the region’s standards. This is consistent with signs of a broader moderation in global trade. Capacity increased 3.3 per cent.

Iata released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), rose 4.2 per cent in May, compared to the same period the year before. This was slightly down from the 5.2 per cent (revised from 4.1 per cent) growth in annual demand recorded in April.

Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 6.2 per cent year-on-year in May. This was the fourth month in a row that capacity growth outstripped demand growth.

After a weak start to 2018, demand for global air freight has now resumed a modest trend upwards. However, the rapid growth seen in 2017 is now over, with demand growing at a significantly slower pace in 2018.

In IATA’s mid-year industry outlook, 2018 freight growth was revised downwards to 4.0 per cent (from the previously forecasted 4.5 per cent in December 2017).

There are three indications that growth will continue at a slower pace: the re-stocking cycle which required quick delivery to meet customer needs is over; the new export orders component of the global manufacturing Purchasing Managers’ Index (PMI) is at a 21- month low; global trade appears to be softening as trade tensions increase.

Alexandre de Juniac, director general and chief executive officer, Iata, said: “We expect air cargo demand to grow by a modest 4.0 per cent in 2018.”

“That’s an uptick from a very weak start to the year. But headwinds are strengthening with growing friction among governments on trade. We still expect demand to grow, but those expectations are dampened with each new tariff introduced. Experience tells us that trade wars, in the long run, only produce losers," he added.

All regions except Africa reported an increase in growth in May 2018, said a statement.

Asia-Pacific airlines saw freight demand increase in May 2018 to grow 4.9 per cent compared to the same period last year. This was an increase over the 3.9 per cent recorded the previous month. Capacity increased by 7.4 per cent. As the largest freight-flying region, carrying close to 37 per cent of global air freight, the risks from protectionist measures impacting the region are disproportionately high. That said, there are signs that demand is accelerating for international FTK’s.

North American airlines’ freight volumes expanded 5.9 per cent in April compared to the same period a year earlier. This was an increase in demand from the 4.6 per cent rate of growth recorded the previous month. Capacity increased by 5.4 per cent. The recent momentum of the US economy and the US dollar has helped strengthen demand for air imports. Data from the US Census Bureau shows a 12 per cent year-on-year increase in imports by air in April, compared to 2.4 per cent growth in March.  

European airlines posted a 2.3 per cent increase in freight volumes in May 2018. This was a slowdown from the 3.5 per cent rate of growth the previous month. Capacity increased 6.0 per cent. Seasonally-adjusted volumes rose slightly over the past two months; however, the annualised rate of growth over the past six months remains low at only 1.5 per cent.

Latin American airlines experienced growth in demand of 11.4 per cent in May - the largest increase of any region for the third consecutive month. Capacity increased by 1.5 per cent. The pick-up in demand over the last 18 months comes alongside signs of economic recovery in the region’s largest economy, Brazil. Seasonally-adjusted international freight volumes surpassed the May 2014 peak this month.  

African carriers saw freight demand contract 2.0 per cent in May compared to the same month last year. Capacity increased by 20.4 per cent. After a surge in international FTK volumes last year, seasonally-adjusted international freight volumes have now trended downwards at an annualised pace of 15 per cent over the past six months. This mainly reflects a softening in demand on markets to/from Asia and the Middle East, it stated. – TradeArabia News Service