The latest report released by International Air Transport Association (IATA) shows that the African carriers’ posted the largest year-on-year increase in demand of all regions in May 2017 with freight volumes growing 27.6 percent. Capacity increased by 14.7 percent over the same period. Demand has been boosted by robust growth on the trade lanes to and from Asia which has grown by nearly 57 percent so far this year.
The report also detailed out the global air freight market scenario. The global demand grew 12.7 percent in May 2017 compared to the same period last earlier. This was also up from the 8.7 percent annual growth recorded in April 2017 and is more than three times higher than the five-year average growth rate of 3.8 percent. Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 5.2 percent year-on-year in May 2017.
“May was another good month for air cargo. Demand growth accelerated, bolstered by strong export orders. And that outpaced capacity growth which should be positive for yields. But the industry can’t afford to rest on its laurels. With indications that the cyclical growth period may have peaked, the onus is on the industry to improve its value proposition by accelerating process modernization and enhancing customer-centricity,” said Alexandre de Juniac, IATA’s Director General and CEO.
The continued growth of air freight demand is consistent with an improvement in world trade. This, in turn, corresponds with new global export orders remaining close to a six-year high in May. There are, however, some signs that the cyclical growth period may have peaked. The global inventory-to-sales ratio, for example, has started rising. This indicates that the period when companies look to re-stock inventories quickly, which often gives air cargo a boost, has ended. Regardless of these developments, the outlook for air freight is optimistic with demand expected to grow at a robust rate of 8 percent during Q3 2017.
All regions, with the exception of Latin America, reported year-on-year double-digit increases in demand in May 2017.
Asia-Pacific airlines’ freight volumes expanded 11.3 percent in May 2017 compared to the same period a year earlier and capacity increased by 6.2 percent. Demand growth has been strongest, between 13-15 percent, on international routes within Asia as well as between Asia and Europe
North American carriers posted an increase in freight volumes of 13.9 percent in May 2017 and a capacity increase of 4.1 percent.
European airlines posted a 15 percent increase in freight volumes in May 2017 and a capacity increase of 5.7 percent. International freight volumes grew by 15.2 percent year-on-year in May with airlines benefiting from strong demand in the Europe-Asia market.
Middle Eastern carriers’ year-on-year freight volumes increased 10.2 percent in May 2017. This was a sharp jump from the 3.1 percent dip in April. The recent swings in the growth rate appear to be mainly a reflection of the more volatile monthly data last year. Capacity increased 1.7 percent. Demand between the Middle East and Europe remains strong, increasing 19 percent so far this year.
Latin American airlines experienced a growth in demand of 6.7 percent in May 2017 compared to the same period in 2016. Capacity increased by 7.1 percent over the same period.