The International Air Transport Association (IATA) has released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), contracted by 3.9 percent in August 2019, compared to the same period in 2018.
This marks the tenth consecutive month of year-on-year decline in freight volumes, the longest period since the global financial crisis in 2008.
Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by two percent year-on-year in August 2019. Capacity growth has now outstripped demand growth for the 16th consecutive month.
Air cargo continues to face strong headwinds from the intensifying trade war between the US and China, as well as weakness in some of the key economic indicators and rising political uncertainties worldwide. Global trade volumes are one percent lower than a year ago
Trade in emerging countries has been underperforming that of advanced nations throughout most of 2019. This is due to higher sensitivity of the emerging economies to trade tensions, rising political instability and sharp currency depreciation in some of the key emerging markets
Global export orders continue to fall. The global Purchasing Managers Index (PMI) remains in contraction territory. Its tracking of new manufacturing export orders has pointed to falling orders since September 2018. And for the second month in a row, all major trading nations reported falling orders.
“The impact of the US-China trade war on air freight volumes was the clearest yet in August. Year-on-year demand fell by 3.9 percent. Not since the global financial crisis in 2008 has demand fallen for 10 consecutive months. This is deeply concerning. And with no signs of a détente on trade, we can expect the tough business environment for air cargo to continue. Trade generates prosperity. Trade wars don’t. That’s something governments should not forget,” said Alexandre de Juniac, IATA’s Director General and CEO.
African carriers posted the fastest growth of any region in August 2019, with an increase in demand of 8 percent compared to the same period a year earlier. This continues the upwards trend in FTKs that has been evident since mid-2018 and makes Africa the strongest performer for the sixth consecutive month.
Capacity grew 17.1 percent year-on-year. Strong trade and investment linkages with Asia have underpinned a double-digit increase in air freight volumes between the two regions over the past year. China recently confirmed a further US$ 60 billion investment into the continent.