News & Industry Affairs / IATA

July 2019 IATA Air Freight Market Analysis
Air cargo volumes remain weak, trade tensions dent outlook


Highlights

  • Industry-wide freight tonne kilometres (FTKs) declined by 3.2% year-on-year in July reflecting the widespread softness in world trade and a number of economic indicators.
  • The weakness in air freight volumes remains broad-based across regions in July. While the largest falls came from Asia Pacific and the Middle East, Africa went against the trend to record double-digit year-on-year FTK growth.
  • Growth in industry-wide air freight capacity increased to 2.6% year-on-year in July, but is still well below the average monthly pace (5.3%) in 2018. With capacity continuing to outpace demand, the freight load factor has eased by 2.7 percentage points over the past twelve months.

Africa showed the strongest y-o-y growth
Regional performance generally remained weak in July. International air cargo volumes in the biggest markets deteriorated. Only the smaller markets, such as Africa and Latin America posted growth compared to the prior year. Africa was the standout region again this month, recording a double-digit increase in cargo volumes over the past year, at 11.3%. The strong recent outcomes observed for the Africa region are, in part, related to the strong inbound investment flows, especially from Asia Pacific. Evidencing this, note the strong performance at a route-area level for cargo flows between these two regions.


Air cargo volumes remained weak in July

Annual growth in air freight tonne kilometres (FTKs) remained in negative territory in July, down by 3.2% in year-on-year terms. This is the 9 th consecutive month of year-on-year decline in air freight volumes.
    The seasonally-adjusted series (which removes the regular seasonal fluctuations in the data) showed month-on-month improvement in July, but it follows a fall of comparable magnitude in June. Indeed, FTKs remain 3.4% lower than theirlevel in July 2018. Hence, this month’s rise cannot be viewed as an indication of trend change.
    Indeed, new tariff increases in the ongoing US-China trade dispute together with the temporary disruption to Hong Kong airport operations increase the chances of a weaker data outturn in August.
    Once again, the regional contribution to the decline in FTKs was broad-based. All regions except for the smallest regions of Latin America and Africa (with shares of 2.9% and 1.8% of total global FTKs, respectively) posted a decline this month.

    Asia Pacific, which has a ~35% share in global FTKs, again accounted for the bulk of the annual decline in industry-wide FTKs. 1.7 percentage points (approximately half) of the current 3.5% year-on-year decline came from Asia Pacific alone. The other large regions of North America and Europe (60% of global FTKs combined) each accounted for 0.5 percentage points of the current year-on-year decline.

    Overall, in the first seven months of the year air freight volumes, were 3.5% lower than their level over the same period a year ago. With further tariff increases scheduled to come into effect, leading to a more pronounced impact of the US-China trade war in the remainder of the year, 2019 could be the first year since 2009 that the global air freight market shrinks...Download the full document here. 

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