Global air freight market continues to face the heat of the US-China trade war as the air freight demand has shown a negative trend consecutively for the 13th time in the International Air Transport Association (IATA) monthly report on the global air freight markets.
According to IATA, air freight demand decreased by 3.4% (FTKs) in May 2019 as compared to the same period in 2018. Freight capacity, measured in available freight tonne kilometres (AFTKs), rose by 1.3% year-on-year in May 2019.
“The impact of the US-China trade war on air freight volumes in May was clear. Year-on-year demand fell by 3.4%. It’s evidence of the economic damage that is done when barriers to trade are erected. Renewed efforts to ease the trade tensions coming on the sidelines of the G20 meeting are welcome. But even if those efforts are successful in the short-term, restoring business confidence and growing trade will take time. And we can expect the tough business environment for air cargo to continue”– Alexandre de Juniac, Director General & CEO, IATA
Air cargo demand has suffered from very weak global trade volumes and trade tensions between the US and China. This has contributed to declining new export orders. The indicator for new manufacturing export orders, part of the global Purchasing Managers Index (PMI), has indicated falling orders since September 2018
Asia-Pacific airlines see 6.4% air freight demand contraction
Asia-Pacific airlines saw demand for air freight contract by a hefty 6.4% in May 2019, compared to the same period in 2018. The US-China trade war and weaker manufacturing conditions for exporters in the region have significantly impacted the market.
With the region accounting for more than 35% of total FTKs, this performance is the major contributor to the weak industry-wide outcome. Air freight capacity increased by 0.3% over the past year.