World Economy

Global Air Freight Demand Slows

Global Air Freight Demand SlowsGlobal Air Freight Demand Slows

Growth in demand for global air freight, measured in freight ton kilometers, slowed to its weakest rate since January in October, the International Air Transport Association said, adding that several indicators showed that the growth peak was over.

Industry-wide freight ton kilometers growth remains well above its five and ten-year average rates in October, a traditionally strong period for demand, Reuters reported.

“Tightening supply conditions in the fourth quarter should see the air cargo industry deliver its strongest operational and financial performance since the post-global financial crisis rebound in 2010,” Alexandre de Juniac, IATA Director General, said.

However, the inventory-to-sales ratio in the US indicates that the period when companies look to restock inventories quickly has ended, and the upward trend in seasonally-adjusted freight volumes has moderated, IATA said.

Air freight demand grew by 5.9% in October, down from 9.2% in September, with all regions but Africa seeing a deceleration in year-on-year FTK growth.

Available capacity rose 3.7% in the month, and load factors increased by 1.0 percentage point to 46.9%. IATA said it expected freight volumes to growth next year, albeit at a slower pace than in 2017.

Meanwhile, Middle Eastern carriers’ year-on-year freight volumes increased 4.6% in October 2017, and capacity increased 3.4%, IATA said.

Middle Eastern carriers saw international freight volumes slow to 4.7% from 9.2% the previous month. The recent volatility produced by the region in the year-on-year growth rate for international freight volumes is due to developments in demand in 2016 rather than a marked change in the current traffic trend. In fact, seasonally-adjusted international freight volumes have continued to trend upwards at a rate of 8-10% over the past six months.


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