Global air freight demand measured in freight tonne kilometres (FTKs) decreased by 3.4 per cent in May 2019 compared to the same period in 2018, data released by the International Air Transport Association (IATA) showed on Wednesday.
This was a slight improvement on the 5.6 per cent contraction in April. In seasonally-adjusted terms, the level of FTKs increased modestly for the third consecutive month, suggesting that the low point of this cycle may be behind us although the market remains weak.
Freight capacity measured in available freight tonne kilometres (AFTKs) rose by 1.3 per cent year-on-year in May 2019. Capacity growth has now outstripped demand growth for the 13th consecutive month.
Air cargo demand has suffered from very weak global trade volumes and trade tensions between the United States and China. This has contributed to declining new export orders. The indicator for new manufacturing export orders, part of the global Purchasing Managers Index (PMI), has indicated falling orders since September 2018.
"The impact of the US-China trade war on air freight volumes in May was clear. Year-on-year demand fell by 3.4 per cent," said IATA's Director General and CEO Alexandre de Juniac.
"It is evidence of the economic damage that is done when barriers to trade are erected. Renewed efforts to ease the trade tensions coming on the sidelines of the G20 meeting are welcome. But even if those efforts are successful in the short-term, restoring business confidence and growing trade will take time. And we can expect the tough business environment for air cargo to continue," said de Juniac.
Asia-Pacific airlines saw demand for air freight contract by a hefty 6.4 per cent in May 2019, compared to the same period in 2018. The US-China trade war and weaker manufacturing conditions for exporters in the region have significantly impacted the market.
With the region accounting for more than 35 per cent of total FTKs, this performance is the major contributor to the weak industry-wide outcome. Air freight capacity increased by 0.3 per cent over the past year, said IATA.
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