Middle Eastern carriers’ freight volumes increased 6.3 per cent year-on-year in December and capacity increased 4.7 per cent, contributing to an annual increase in demand of 8.1 per cent in 2017 – the third fastest growth rate of all the regions, said Iata in a new report.

 Capacity increased 2.6 per cent annually. However, having not seen the strong upward demand of other regions in the first half of 2017, Middle-Eastern carries’ share of global demand dropped for the first time in 18 years, added the International Air Transport Association (Iata).

African carriers’ posted the fastest growth in year-on-year freight volumes, up 15.6 per cent in December 2017 and a capacity increase of 7.9 per cent. This contributed to an annual growth in freight demand of 24.8 per cent in 2017 – the fastest growth rate of all regions.

This is only the second time African airlines have topped the global demand growth chart since 1990. Capacity in 2017 increased 9.9 per cent. Demand has been boosted by very strong growth in Africa-Asia trade which increased by more than 64 per cent in the first eleven months of 2017.

Globally, the full-year 2017 data for air freight markets shows that demand, measured in freight tonne kilometres (FTKs) grew by 9.0 per cent. This was more than double the 3.6 per cent annual growth recorded in 2016.

Freight capacity, measured in available freight tonne kilometres (AFTKs), rose by 3.0 per cent in 2017. This was the slowest annual capacity growth seen since 2012. Demand growth outpaced capacity growth by a factor of three.

Air cargo’s strong performance in 2017 was sealed by a solid result in December. Year-on-year demand growth in December increased 5.7 per cent. This was less than half the annual growth rate seen during the middle of 2017 but still well above the five-year average of 4.7 per cent. Freight capacity grew by 3.3 per cent year-on-year in December.

Full-year 2017 demand for air freight grew at twice the pace of the expansion in world trade (4.3 per cent). This outperformance was a result of strong global demand for manufacturing exports as companies moved to restock inventories quickly.

"Air cargo had its strongest performance since the rebound from the global financial crisis in 2010. Demand grew by 9.0 per cent. That outpaced the industry-wide growth in both cargo capacity and in passenger demand. We saw improvements in load factors, yields and revenues. Air cargo is still a very tough and competitive business, but the developments in 2017 were the most positive that we have seen in a very long time," said Alexandre de Juniac, IATA’s director general and CEO.

"The outlook for air freight in 2018 is optimistic. Consumer confidence is buoyant. And we see growing strength in international e-commerce and the transport of time - and temperature-sensitive goods such as pharmaceuticals.

“Overall the pace of growth is expected to slow from the exceptional 9.0 per cent of this year. But we still expect a very healthy 4.5 per cent expansion of demand in 2018. Challenges remain, including the need for industry-wide evolution to more efficient processes. That will help improve customer satisfaction and capture market share as the expectations of shippers and consumers grow ever more demanding," said de Juniac.         

Regional performance    

Airlines in all regions reported an increase in demand in 2017.

Asia-Pacific carriers saw demand in freight volumes grow 5.6 per cent in December 2017 compared to the same period in 2016 and capacity grow by 2.2 per cent. This contributed to a growth in freight demand of 7.8 per cent in 2017 compared to 2016. Capacity increased 1.3 per cent.

North American airlines saw freight demand increase by 5.4 per cent in December 2017 year-on-year and capacity increase of 2.2 per cent. This contributed to an annual growth in 2017 of 7.9 per cent.  Capacity grew by 1.6 per cent in the 2017 calendar year.

European airlines posted a 5.0 per cent year-on-year increase in freight demand in December and a capacity rise of 3.2 per cent. The strong performance in December boosted cargo volumes for the 2017 calendar year by 11.8 per cent - the largest increase of all regions with the exception of Africa. Capacity in the region increased by 5.9 per cent in the 2017 calendar year.

Latin American airlines experienced a growth in demand of 4.9 per cent in December and a capacity increase of 11.6 per cent. This contributed to an annual growth in freight demand of 5.7 per cent and a capacity increase of 3.1 per cent in 2017. This was the first increase in annual demand in two years. – TradeArabia News Service