Fourth double digit month in five months but growth may be peaking

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IATA director general and CEO, Alexandre de Juniac

Air freight has grown at double digit rates for the fourth time in five months but the International Air Transport Association (IATA) warns that growth may be nearing a peak.

Demand measures in freight tonne kilometres (FTK) increased by 11.4 per cent in July compared to the same month in 2016, and at nearly four times the 10 year average growth rate of 3.1 per cent.

IATA says the robust growth is consistent with an uptick in global trade, rising export orders and upbeat business confidence indicators however the signs are it is nearing a peak as seasonally adjusted volumes were flat in June and fell in July; and the global inventory-to-sales ratio has stabilised.

IATA director general and chief executive officer, Alexandre de Juniac says: “July was a strong month for air cargo with double-digit growth. And for the third consecutive month demand for airfreight grew at a faster pace than demand for air travel.”

“While the outlook for the rest of the year remains positive, there are signs that the cyclical growth period may be nearing a peak.”

All regions of the world saw growth in July, with Africa leading the way at 33.7 per cent, the second fastest monthly rise in seven years, though it only represents 1.6 per cent of the world share.

Even Latin America grew in July, with demand increasing 5.8 per cent, and IATA says seasonally-adjusted international freight volumes grew strongly but remain nine per cent lower than at the peak in 2014 as the region continues to be affected by challenging economic and political conditions, particularly in Brazil.

In other regions of the world, Europe grew 12.1 per cent helped by demand on the Europe-Asia market though the strengthening of the Euro may begin to weigh upon the region’s exporters.

North America increased by 11.9 per cent with the strong US dollar benefitting imports though it has declined since the start of the year, which should rebalance trade flows.

Demand remained strong on all major routes to, from and within Asia Pacific, helping freight grow 11 per cent, and the Middle East increased by 9.3 per cent though the region’s carriers face strong competition particularly on the Asia-Europe route.

Capacity across the world also grew by 3.7 per cent in available FTKs, and load factor improved by three percentage points to 43.7 per cent.