IATA: July a “positive month” but global trade remains subdued

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IATA director general and CEO, Alexandre de Juniac

Airfreight has had “a positive month” in July with Europe posting the strongest growth for only the fourth time in a decade, the International Air Transport Association (IATA) says.

The association says freight tonne kilometres (FTK) grew by five per cent, the fastest pace since early 2015 and despite the subdued global trade backdrop, carriers in Asia-Pacific, Europe, North America and the Middle East all saw growth.

Europe saw the strongest growth, up 7.2 per cent helped by strong German exports, followed by the Middle East at 6.7 per cent, then Asia Pacific at 4.9 per cent driven by intra-Asian traffic, and North America increasing 4.1 per cent despite the continuing strength of the US dollar hitting exports.

Despite the good news, IATA’s new director general and chief executive officer, Alexandre de Juniac warns it is not all positive. “July was a positive month for air freight—which is an all too rare occurrence. Despite that, we must recognise that we face some strong headwinds on fundamental aspects of the business.”

“Global trade growth is sluggish and business confidence is weak. And the political rhetoric on both sides of the Atlantic is not encouraging for further trade liberalisation.”

Overcapacity has continued, with available FTKs increasing 5.2 per cent, pushing the load factor down 0.1 percentage points to 41.3 per cent. Africa continues to suffer from the worst overcapacity, with a load factor of 19.4 per cent as carriers increase long-haul capacity and it is highest in Asia-Pacific at 53.1 per cent.