KUALA LUMPUR (July 5): Global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), rose 4.2% year-on-year in May 2018, according to International Air Transport Association (IATA).
In a statement yesterday, IATA said this was slightly down from the 5.2% (revised from 4.1%) growth in annual demand recorded in April 2018.
It said freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 6.2% year-on-year in May 2018.
IATA explained this was the fourth month in a row that capacity growth outstripped demand growth.
The association said that after a weak start to 2018, demand for global air freight has now resumed a modest trend upwards.
However, it said the rapid growth seen in 2017 is now over, with demand growing at a significantly slower pace in 2018.
In IATA’s mid-year industry outlook, 2018 freight growth was revised downwards to 4.0% (from the previously forecasted 4.5% in December 2017)
IATA said there are three indications that growth will continue at a slower pace:
The re-stocking cycle which required quick delivery to meet customer needs is over
The new export orders component of the global manufacturing Purchasing Managers’ Index (PMI) is at a 21- month low
Global trade appears to be softening as trade tensions increase
IATA director general and CEO Alexandre de Juniac said the assciation expects air cargo demand to grow by a modest 4.0% in 2018.
“That’s an uptick from a very weak start to the year. But headwinds are strengthening with growing friction among governments on trade.
“We still expect demand to grow, but those expectations are dampened with each new tariff introduced. Experience tells us that trade wars, in the long run, only produce losers," he said.