IATA’s Director General and Chief Executive Officer (CEO), Alexandre de Juniac
• African carriers post 17.7% increase
The International Air Transport Association (IATA) released data for global air freight markets in September 2017 showing that demand, measured in Freight Tonne Kilometers (FTKs), rose 9.2 per cent compared to the same month in 2016.
This was the slowest pace of growth seen in five months. However, it was still significantly higher than the five-year average growth rate of 4.4 per cent.
Meanwhile, African carriers posted the largest year-on-year increase in demand of all regions in September 2017, with freight volumes rising 17.7 per cent.
According to the clearing house for over 275 global airlines, the volume is a slowdown from August but still more than twice the five-year average growth pace of 8.7 per cent.
Freight capacity, measured in Available Freight Tonne Kilometers (AFTKs), rose by 3.9 per cent compared to September of last year —less than half the pace of demand growth. This is positive for industry load factors, yields, and financial performance.
It appears that the industry has passed a cyclical growth peak. The upward trend in seasonally-adjusted freight volumes in Q3 has eased and the inventory-to-sales ratio in the US is now trending sideways. This indicates that the period when companies look to restock inventories quickly—which often gives air cargo a boost—has ended.
IATA’s Director General and Chief Executive Officer (CEO), Alexandre de Juniac, observed that while the demand in September is slower than in previous months, it remains stronger than anything we have seen in recent memory.
“But there are signs that this demand spurt may have peaked. So it becomes even more important to reinforce the industry’s competitiveness by accelerating the modernisation of its many antiquated processes,” de Juniac said.
With year-to-date demand growth of 10.1 per cent, the IATA forecast of 7.5 per cent growth in air freight demand for 2017 appears to have significant upside potential even if the peak of the economic cycle has passed.
On the African front, capacity increased by 2.6 per cent over the same time period. Demand has been boosted by very strong growth on the trade lane to and from Asia which increased by more than 67 per cent in the first eight months of the year. However the upward trend in seasonally-adjusted volumes has flattened in recent months.
On how other regions performed, the Asia-Pacific airlines saw freight volumes increase by 9.3 per cent in September 2017, compared to the same period last year. Capacity in the region expanded 5.3 per cent. Demand growth was strong on all the major routes to, from and within Asia-Pacific, consistent with strong export order books for the region’s manufacturers.
Exporters in Chinese Taipei, China and Japan all reported growing order books.
North American carriers posted an increase in freight volumes of 7.4 per cent for the month; the region also posted the second fastest international growth rate among regions (11.0 per cent). Capacity increased 1.4 per cent. The strength of the US dollar boosted the inbound freight market in recent years. Data from the US Census Bureau shows a 12.0 per cent increase in air imports to the US in the first seven months of 2017, compared to a slower rise in export orders of 6.6 per cent.
However, there are signs that the decline in the US dollar since the start of the year is beginning to rebalance trade flows. In August 2017, the most recent month for which data are available, exports from the US by air grew 12.7 per cent while imports by air grew more slowly at 7.4 per cent.
European airlines posted a 10.3 per cent increase in freight demand in September 2017, and a capacity increase of 5.6 per cent. Concerns that the recent strengthening of the euro might have affected the region’s exporters have not materialized. In fact, German manufacturers’ export orders are growing at their fastest pace in more than seven years. Freight demand is strongest on the routes to and from Asia – which have received a boost in trade from the economic stimulus measures put in place by China – and across the Atlantic.
source:https://guardian.ng/business-services/global-air-freight-demand-peaks-by-9-2/
