Global air cargo’s peak season is off to a disappointing start, with demand down 3.5% in October 2019 year-on-year, the 12th consecutive month of year-on-year declines in freight volumes, according to the International Air Transport Association (IATA).
Freight capacity rose by 2.2% year-on-year in October 2019. Capacity growth has now outstripped demand growth for the 18th consecutive month.
Over the past year, air cargo has suffered from the effects of the trade war between the US and China, the deterioration in global trade, and a broad-based slowing in economic growth, IATA noted.
Demand is set to decline in 2019 overall—the weakest annual outcome since the global financial crisis, said Alexandre de Juniac, IATA’s director general and CEO.
“It has been a very tough year for the air cargo industry,” he added.
By region, airlines in Asia-Pacific and the Middle East suffered sharp declines in year-on-year growth in total air freight volumes in October 2019, while Latin American and European carriers experienced a more moderate decline. Africa was the only region to record growth compared to October last year.
Asia-Pacific airlines saw demand for air freight contract by 5.3% in October 2019 compared to the same period in 2018. Capacity increased by 0.6%. The US-China and South Korea-Japan trade wars have negatively affected the region. And the disruption to operations at Hong Kong International Airport—the largest cargo hub in the world—continues to impact activity.
“However, the thawing of US-China trade relations and robust economic growth in key regional economies are positive developments,” said IATA.
Passenger demand growth remains soft
Meanwhile, global passenger traffic demand climbed 3.4% in October compared to the year-ago period, a modest slowdown from 3.9% growth recorded in September, owing to softer traffic performance in domestic markets.
October capacity increased by 2.2% and load factor climbed 0.9 percentage point to 82.0%, which was a record for October.
“Traffic growth continues to be depressed compared to historical long-term growth levels, reflecting continued moderating economic activity in some key markets and sagging business confidence,” said de Juniac, but added that traffic continuing to grow is a positive sign.
October international passenger demand rose 3.2% compared to October 2018, unchanged from September’s year-over-year performance. Except for Latin America, all regions recorded increases, led by Middle East airlines for the first time since June 2018. Capacity climbed 1.6%, and load factor rose 1.3 percentage points to 81.0%.
Asia-Pacific airlines’ October traffic increased 3.8% compared to the year-ago period, a bit below the 4.0% annual growth recorded in September and well down on 2018 growth largely owing to weaker business confidence in a number of key markets, the impact of the US-China trade war and the recent disruptions in Hong Kong. Capacity rose 2.7% and load factor edged up 0.9 percentage point to 79.6%.
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