International Air Transport Association (IATA) Director General and CEO Alexandre de Juniac has warned that trade wars “only produce losers” after air freight demand rose modestly in May, compared with the same month last year.
Air freight demand – measured in freight tonne kilometers (FTKs) – was up 4.2% in May, which was a slowdown compared to the 5.2% annual growth achieved in April. A decline in growth had been expected after the near double-digit demand increased for the 2017 full year. Available freight capacity (AFTKs) grew by 6.2% year-on-year in May, making it the fourth consecutive month in which capacity outstripped demand.
Experience tells us that trade wars, in the long run, only produce losers
Discussing the revised figures, de Juniac said: "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.”
IATA’s mid-year industry outlook has revised 2018 freight growth to 4.0%, down from the previously forecasted 4.5% in December 2017.
Indicators that growth is set to continue in this manner include the conclusion of the re-stocking cycle, export orders suffering a 21-month low and growing trade tensions.