Global air freight demand decreased by 4.8% in June 2019 compared to the same period in 2018, marking the eighth consecutive month of year-on-year decline in freight volumes, according to data released by the International Air Transport Association (IATA). The June deceleration is also bigger than the fall of 3.5% in May 2019.
Signs of a modest recovery in recent months appear to have been premature, with the June contraction broad-based across all regions except for Africa, said the IATA analysis. Capacity growth remains subdued and the cargo load factor continues to fall. Globally, trade growth is languishing, and business uncertainty is compounded by the latest tariff increases in the U.S.-China trade dispute.
“Additional tariff increases in the ongoing US-China trade dispute, which came into effect on 1 June are likely to have contributed to this month’s outcome, along with further signs of moderation in the global macroeconomic backdrop,” said the report.
“Global trade continues to suffer as trade tensions—particularly between the US and China—deepen. As a result, air cargo markets continue to contract. Nobody wins a trade war,” said Alexandre de Juniac, IATA’s director general and CEO.
Highlighting the impact of the U.S.-China trade dispute, over the first half of the year, U.S. goods exports to China are down 18% compared with the first half of 2018 while goods exports from China are down more than 12%.
Globally, the performance of world trade has continued to languish, slipping back into negative year-on-year growth in the latest available data (May). World trade volumes are currently 0.4% lower than a year ago.
Airlines in Asia-Pacific and the Middle East once again suffered the sharpest declines in year-on-year growth in total air freight volumes in June 2019. Africa was the only region to show any growth.
Asia-Pacific airlines saw total demand for air freight contract by 5.4% in June 2019, compared to the same period in 2018. International volumes are 5.8% lower than their year-ago level, a slight improvement on last month, but still a very weak outcome.
Although an important factor, the U.S-China trade war is not solely responsible for the fall, said IATA. Volumes for the within-Asia market have decreased more than 10% over the past year. Air freight capacity increased by 1.8% over the same period.
“Given the close economic relationships between countries within Asia Pacific, the performance of the Chinese economy, in particular, has wider implications for the region. Highlighting this, FTKs [freight tonne kilometers] for the Within Asia market have fallen by more than 10% over the past year, weighing upon the overall regional performance. Modest growth in air cargo volumes to/from Europe (up 2% year-on-year) has partly offset the weakness in other key Asia Pacific markets,” said IATA.
In the first half of the year, global air freight demand is down by 3.6%, and international freight volume has contracted 4.3%, said IATA.
For Asia-Pacific, year-to-date total demand has fallen by 7.4%, while international freight is down 8.1%.
Photo: Gerd Altmann from Pixabay
