Capacity continues to outperform annual growth in demand as international e-commerce grows.

cargo temperature

Data released by the International Air Transport Association shows that annual freight demand,  measured in freight tonne kilometers (FTKs), grew 3.5% compared to 2017.

The growth is significantly lower than the 9.7% recorded in 2017, which IATA said was an “extraordinary” result.

Capacity, measured in available freight tonne kilometers (AFTKs), outstripped annual growth in demand. It rose 5.4% in 2018.

The annual growth of international e-commerce was a positive factor for the year, but IATA Director General and CEO Alexandre de Juniac said the current economic climate and political tensions continue to affect demand.

“Air cargo demand lost momentum towards the end of 2018 in the face of weakening global trade, sagging consumer confidence and geopolitical headwinds,” he said. 

“Still, demand grew by 3.5% compared to 2017. We are cautiously optimistic that demand will grow in the region of 3.7% in 2019. 

“But with the persistence of trade tensions and protectionist actions by some governments there is significant downside risk. Keeping borders open to people and to trade is critical.”

Air cargo demand lost momentum towards the end of 2018 in the face of weakening global trade, sagging consumer confidence and geopolitical headwinds

In December, year-on-year cargo performance figures for 2018 were sealed by a softening in demand, as it dropped by 0.5%. 

The results were the worst since March 2016, and year-on-year freight capacity once again outpaced demand for the tenth consecutive month as it grew 3.8%.

Demand suffered due to the softening of key drivers such as the end of the restocking cycle in early 2018, a weakening in global economic activity, contraction in all major export books besides the US, and a drop in consumer confidence.

De Juniac said the figures should serve as a warning to freight carriers.

“To attract demand in new market segments, the air cargo industry must improve its value proposition,” he said.

“Enabling modern processes with digitalization will help build a stronger foothold in e-commerce and the transport of time- and temperature-sensitive goods such as pharmaceuticals and perishables.” 

Airlines in all regions with the exception of Africa reported an annual increase in demand in 2018.

See the breakdown by international region below: 

  • Asia-Pacific carriers posted the weakest growth of any region in December 2018 with a decrease in demand of 4.5% compared to the same period a year earlier. Capacity increased by 2.6%. The weaker performance in December contributed to growth in freight demand of only 1.7% in 2018 compared to 2017. Annual capacity increased 5.0%. 
  • North American airlines posted the fastest growth of any region for the seventh consecutive month in December 2018 with an increase in demand of 2.9% compared to the same period a year earlier. Capacity increased by 4.5%. This contributed to an annual growth in demand in 2018 of 6.8%, matching the rate of capacity increase. 
  • European airlines posted a 1.9% year-on-year increase in freight demand in December 2018 and a capacity rise of 3.7%. The improved performance in December contributed to an annual growth in demand for air cargo of 3.2% in 2018. Capacity increased by 4.3% in the same year. 
  • Middle Eastern carriers’ freight volumes increased 0.1% year-on-year in December and capacity increased 4.5%. This contributed to an annual increase in demand of 3.9% in 2018 – the third fastest growth rate of all the regions. Annual capacity increased 6.2%.  
  • Latin American airlines experienced a decrease in year-on-year demand of 0.1% in December after three months of positive growth. Capacity increased by 6.0%. Annual growth in freight demand among Latin America carriers in 2018 increased by 5.8% - the second fastest of all regions. Annual capacity increased 3.4% in 2018. 
  • African carriers’ saw freight demand decrease by 2.2%, in December 2018, compared to the same month in 2017. This was significantly less than the 9.4% decrease the previous month. Capacity increased by 4.9% year-on-year. Annual growth in freight demand among Africa carriers in 2018 decreased by 1.3% and capacity grew by 1%.
Top