Asia-Pacific carriers saw air freight volumes grow at a double-digit clip in August 2017, buoyed by strong demand for Asian export products, according to data from the International Air Transport Association (IATA).
The region’s carriers posted volume growth of 11.3% for the month year-on-year, and capacity increased by 5.7%. Demand growth was strong on all the major routes to, from, and within Asia-Pacific, consistent with strong export order books for the region’s manufacturers. Seasonally adjusted international freight volumes increased in August after a slight dip in July and are now almost 6% above the volumes reached following the 2010 post-global financial crisis bounce-back.
For the airline industry overall, meanwhile, global air freight demand increased by 12.1% in August 2017 compared to the same period a year ago. This is the fifth time in six months of double-digit gains on the previous year’s performance, said IATA.
Demand is growing at exceptional speed when compared to the five-year average growth rate of 4.4%, it added. Freight capacity grew by 4.7% 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 pickup in global trade, IATA noted. World trade volumes grew 4.2% 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.
However, signs that the peak of the cyclical growth period may be near also continue. The global inventory-to-sales ratio in the U.S., for example, has stopped falling. This usually means that re-stocking to meet demand (which gives air freight a boost), is ending.
The outlook remains strong nonetheless. “With several months of double-digit growth in 2017, the current IATA forecast of 7.5% growth in air freight demand for 2017 appears to have significant upside potential even if we are approaching a cyclical peak,” said the organization.
“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. 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,” said Alexandre de Juniac, IATA’s director general and CEO.
“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,” he added.
All regions except Latin America posted double-digit growth in August 2017.
North American carriers posted an increase of 11.7%, and a capacity increase of 3.7% year-on-year. Seasonally adjusted international freight volumes remain strong.
European airlines posted an 11.8% increase and a capacity increase of 5.1%. Double-digit growth in international demand has now been recorded in 10 of the past 12 months.
Middle Eastern carriers’ year-on-year freight volumes increased 14.1% in August 2017 and capacity increased 2.8%. The strong pickup in demand largely reflects favorable comparisons to a short-lived weak patch in demand in 2016 rather than an acceleration in the current demand trend.
Latin American airlines experienced a growth in demand of 8.5% and capacity increased by 9.3%. International freight volumes increased by 9.5% over the same period. This is close to a seven-year high and well above the five-year average rate of -0.1%.
African carriers posted the largest year-on-year increase in demand of all regions in August 2017 with freight volumes growing 29.4%. This is a slight slowdown from July but still more than three times the five-year average pace of growth of 8.8%.
