Middle East carriers still outperforming global market
Middle Eastern carriers saw a rise in volumes, measured by Freight Tonne Kilometers (FTKs), of 10.6% in March 2014, fuelled by network and capacity expansion, according to new data released by The International Air Transport Association (IATA).
IATA says trade is also increasing among Middle Eastern economies and capacity grew 17.1% during that month.
For global air freight markets, there was a modest 1.6% rise in volumes in March, which is in sharp contrast to the exceptionally strong 12.2% rise reported for February – although February’s performance was positively skewed by the combined impacts of the timing of the Lunar New Year and the labor dispute at US West Coast seaports.
Globally, freight performance over the first quarter of 2015 indicates year-on-year growth of 5.3%, which is in line with general global economic trends and slightly higher than the 4.5% growth that was anticipated in IATA’s December outlook.
While Middle East carriers showed rapid growth, Latin American and European carriers reported market contractions. The key economies of Brazil and Argentina are struggling, and a general increase in regional trade activity is yet to carry over into stronger air freight demand. The European Central Bank has been engaged in quantitative easing in an attempt to improve the economy and to offset weakness that persists as a result of the Russian sanctions
Meanwhile, African airlines experienced a 2.4% increase in FTKs. The region has posted solid growth in Q1 2015, indicating that regional trade is holding up well, despite the under-performance of the Nigerian and South African economies, and capacity rose 0.5%.
“The air cargo industry is on a solid but unspectacular growth trend and there is little evidence today that would point towards an acceleration as the year goes on," said Tony Tyler, IATA’s director general and CEO.
Longer-term, IATA called on governments to work in partnership to remove barriers to trade.
“The growth in air cargo markets has shifted down a gear. World trade and air cargo are still growing, but only in line with industrial production.
"Removing barriers to trade in line with the World Trade Organisation (WTO) Trade FacilitationAgreement (TFA) would deliver a much needed boost to the global economy,” added Tyler.
The World Economic Forum estimates that the WTO TFA could boost the global economy by as much as $1 trillion.