The International Air Transport Association (IATA)’s recently released report on the global air freight market has indicated the growth of 0.1% in air freight demand in March 2019 as compared to the same period in 2018.
In perspective of seasonally adjusted terms, it may seem significant improvement from the demand contraction of 4.9% which was recorded in February 2019 but at large the demand is still down by 1.5% from the past year.
Freight capacity, measured in available freight tonne kilometres (AFTKs), rose by 3.1% year-on-year in March 2019. Capacity growth has now outstripped demand growth for 11 out of the last 12 months.
Demand for air cargo continues to face significant headwinds:
- Global trade volumes have fallen by 1% over the past year
- Global economic activity and consumer confidence continue to weaken
- And the export order component of the global manufacturers Purchasing Managers Index (PMI) has indicated falling global export orders since September 2018
“Year-on-year demand for air freight edged back into positive territory in March with 0.1% growth. After four consecutive months of contraction, this is an encouraging development. But the headwinds from weakening global trade, growing trade tensions and shrinking order books have not gone away.”– Alexandre de Juniac, Director General and CEO, IATA
Slowdown in Chinese economy impacting Asia-Pacific market
All regions reported year-on-year demand growth in March 2019, except Asia-Pacific which contracted on the demand parameter.
Asia-Pacific airlines saw demand for air freight shrink by 3.4% in March 2019, compared to the same period in 2018. This was a significant improvement from the 12.0% decline in growth from the previous month.
Weaker manufacturing conditions for exporters in the region, ongoing trade tensions and a slowing of the Chinese economy impacted the market. Capacity decreased by 1.0%.