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December 2018 IATA Air Freight Market Analysis
Air cargo volumes end of 2018 on a soft note

Highlights of the December 2018 Air Freight Market Analysis

  • Industry-wide freight tonne kilometres (FTKs) ended 2018 0.5% lower than their level of December 2017; the slowest annual growth rate since early-2016.
  • For the year as a whole, FTKs increased by 3.5% in 2018, down from 9.7% in 2017. With capacity increasing faster than demand, the 2018 freight load factor fell by 0.9pp compared with 2017.
  • While a slowdown in freight demand growth was expected following the boost from the inventory restocking cycle in 2017, there are indications that the data are also reflecting the impact of the increasing headwinds to freight demand from renewed signs of weakness in global trade and economic indicators.
  • We expect cargo volumes to increase by 3.7% in 2019; the risks to this forecast appear tilted to the downside.

Another annual decline for African carriers...
Although the year-on-year growth in international FTKs flown by African airlines remained in negative territory in December, a sizeable improvement is evident, with growth lifting to -1.5%, from -8.7%yoy in November. The level of FTKs has been below that of a year previous in nine of the past ten months. This followed a period of very strong growth in 2H16 and into 2017, which peaked at more than 30%yoy in March 2017. Although international FTKs for the African airlines have moderated from the 2017 highs, it is notable that air cargo volumes are now 50% higher than the most recent trough observed in late 2015. This equates to a double-digit annual growth rate of around 13% over the past three years.

Air cargo volumes lost momentum in late-2018…

Industry-wide FTKs ended 2018 on a soft note, with year-on-year cargo volumes down 0.5% compared with their level of December 2017; the slowest annual growth rate since March 2016. After drifting sideways for a number of months through the middle of 2018, the seasonally-adjusted FTK series has stepped down a notch more recently. For the year as a whole, FTKs increased by a moderate 3.5% in 2018. This was down from a well above-trend pace of 9.7% in 2017 and was also a little weaker than our forecast (4.1%) for the year.

…partly due to the global inventory cycle unwind…

As we have noted previously, the easing in FTK growth observed over the course of 2018 primarily reflects the typical pattern seen after inventory restocking cycles in the past. Recall that air freight volumes grew much faster than global goods trade during 2017 as firms turned to the speed afforded by air freight to restock their inventory levels quickly. That relative outperformance was unwound in 2018 despite a moderation in the growth of global goods trade. Download the full document here. 

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