Air Freight Markets Grow in April
Despite a 3.2% increase in demand for global air freight, the International Air Transport Association (IATA) warns that the decline in global trade does not bode well for air cargo markets in the months ahead.
According to the IATA demand growth results for global air freight markets for April 2016 showed a 3.2% increase measured in freight tonne kilometres (FTKs) compared to the same period last year, yet yields remained pressured as April freight capacity (measured in available freight tonne kilometres or AFTKs) increased by 6.6% year-on-year.
The increase in demand was broad-based across all regions with the exception of Latin America. The strongest growth occurred in the Middle East and Europe, with April demand up by 7.7% and 6.8%, respectively, compared to the same period last year.
Overall, the demand for air cargo remains soft and lags behind the relatively robust growth on the passenger side of the business. This is largely driven by weak world trade. The first quarter of 2016 saw the first annual decline in trade volumes since the global financial crisis in 2009, and the World Trade Organisation (WTO) predicts only sluggish growth for the remainder of 2016.
“While the April uptick in demand growth for air cargo is encouraging, the overall economic environment is not. The decline in global trade does not bode well for air cargo markets in the months ahead,” said Tony Tyler, IATA’s Director General and CEO.
Middle Eastern carriers saw demand expand by 7.7% and capacity rise 11.0% in April 2016 compared to the same period last year. Although carriers in the region continued to report the fastest growth in aggregate, the April growth rate was about half that recorded in April 2015. This reflects both a slowdown in network expansion by the region’s main carriers over the past six months and weak trading conditions.