The effects of the economic slowdown and trade wars on the air passenger and freight markets, particularly those in Asia-Pacific, are apparent as 2019 draws nearer to a close, according to a new report from Airports Council International (ACI).
The global passenger market grew 2.6% year-over-year in September, showing signs of stabilizing after a challenging 2019, while the general outlook for the air freight industry remained negative, with global volumes declining by 4.2%, said ACI in a release November 26.
Year-to-date growth of the global passenger market stood at 3.1%, less than half of the 6.4% growth observed in 2018. The year-to-date figure for the embattled global freight industry stood at -3.1%.
“Global passenger traffic may end up stabilizing around a figure of +3% growth by the end of 2019 which, while a significant slowdown from 2018’s +6.4%, is still a solid performance given the current geopolitical environment,” ACI world director General Angela Gittens said.
“Trade wars, a slowing global economy and increasing social unrest around the world have created a challenging backdrop for the air transport industry. Despite this, growth is expected to start recovering in 2020 and we can remain optimistic that the new year will bring an easing of tensions in international relations between major economies.”
Air passenger market
The domestic segment grew by 2.4%, after posting a weaker month of August (+1.4%), led by a surge in North America. The international segment, on a decline since the start of the year, posted 2.9% year-over-year growth in September. Year-to-date growth for the two markets stood at 2.2% and 4.3%, respectively.
By region, North America ended the month with a 3.7% year-over-year increase, the best performance. Year-to-date growth by the month’s end stood at 3.4%, just slightly below Europe. Its domestic market in September gained 4.1% versus 2.5% in August. Its international segment posted only 1.5% increase for the month.
“The two segments are now close to parity in year-to-date growth, with international passengers having increased by +3.6% for the first nine months of the year, and domestic passengers having gained +3.4%,” said the report.
Europe and Asia-Pacific posted growth of 2.1% and 2%, respectively, in September year-over-year. Europe’s gains up to the end of the third quarter remained more than twice as high as Asia-Pacific’s, at +3.6% versus +1.7%.
“Though the chances of an end-of-year decline in the Asia-Pacific market remain quite slim, the effects of the economic slowdown and trade wars are quite apparent in the region,” said ACI.
Africa grew 6.7% during the period, and year-to-date results stood at 7.3%. The region is poised to experience the highest regional growth once again in 2019, after gaining 9.4% in 2018, ahead of Asia-Pacific’s 8.1%.
Latin America-Caribbean and the Middle East posted growth rates of 2.7% and 2.2%, respectively, in September, with year-to-date results reaching 4.7% and 2.4%, respectively.
Air cargo sector
Meanwhile, the general outlook for the air freight industry remained negative, with global volumes declining by 4.2% in September as domestic markets succumbed to global pressures.
The year-to-date figure stood at -3.1% and, with only three months left in the year, “global trade growth will be difficult to achieve,” said ACI.
“The freight market continued to struggle with the international and domestic volumes posting comparable declines. The domestic freight market, which has held up well in the face of global uncertainty in 2019, could end the year with an overall decline with the North American market, which has been the main driver of the domestic segment, having finally buckled under a slowing global economy,” said Gittens.
Both international and domestic volumes fell, down 4.2% and 4%, respectively. The international market declined by 4.7% year-to-date. The domestic market is still in the positive with three months left to the year, at 0.4%.
Europe fell the least, by -2.4% year-over-year. Year-to-date results stood at -2.9%, driven almost entirely by the region’s international market.
North America posted negative growth of 4.8% for September for the second month in a row. Year-to-date results had remained positive up until August, but have finally fallen below 0%, at -0.3%. The international freight market now has a year-to-date figure of -4.8%, while the once resilient domestic market fell by 3.3% in September after moving sideways in August.
Asia-Pacific’s freight volumes declined by 3.9% in September, a slight improvement over August’s 6.8% fall.
“With the region suffering the brunt of the trade wars’ impacts due to their disruption of supply chains, and an ongoing political crisis in Hong Kong, 2019 will be a particularly difficult year for its freight industry,” said ACI.
Once again, Latin America-Caribbean, Africa and the Middle East all posted declines of more than 5% in September, at -5.5%, -6.4% and -6.7%, respectively.
Photo by Oskar Kadaksoo