DOHA: Middle Eastern carriers’ freight volumes increased 4.4 percent year-on-year in January 2018, the slowest growth of all regions.
Capacity increased 6.3 percent. Seasonally adjusted freight volumes continued to trend upwards during the first month of the year, however, the region’s carriers remain affected by the ongoing challenging political environment in the Middle East.
The International Air Transport Association’s (IATA) data for global air freight markets showed that demand, measured in freight tonne kilometers (FTKs), rose 8.0 percent in January 2018 compared to the year-earlier period. This was up from the 5.8 percent annual growth recorded in December 2017.
Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 4.2 percent year-on-year in January 2018.
The continued positive momentum in freight growth into 2018 reflects the fact that demand drivers for air cargo remain supportive. Global demand for manufacturing exports is buoyant and meeting this strong demand is leading to longer supply chain delivery times. Demand for air cargo may strengthen as a result, with companies seeking faster delivery times to make up for longer production times.
“With 8 percent growth in January, it’s been a solid start to 2018 for air cargo,” said Alexandre de Juniac (pictured), IATA’s Director General and CEO.
“That follows an exceptional year in which demand grew by 9 percent. We expect demand for air cargo to taper to a more normal 4.5 percent growth rate for 2018. But there are potential headwinds. If President Trump follows through on his promise to impose sanctions on aluminum and steel imports, there is a very real risk of a trade war. Nobody wins when protectionist measures escalate,”he added.
Asia-Pacific airlines saw demand in freight volumes grow 7.7 percent in January 2018 and capacity increase by 2.2 percent, compared to the same period in 2017. The increase largely reflects the ongoing strong demand experienced by the region’s major exporters, China and Japan which has been driven in part by a pick-up in economic activity in Europe.
However, the upward-trend in seasonally-adjusted volumes has paused.
European airlines posted a 10.5 percent increase in freight volumes in January 2018. Capacity increased 5.3 percent. The strong European performance corresponds with a very healthy demand for new export orders among the region’s manufacturers. Seasonally-adjusted volumes jumped 3 percent in month-on-month terms in January – the largest increase since March 2017.
North American airlines’ freight volumes expanded 7.5 percent in January 2018 year-on-year, as capacity increased 4.2 percent.
The strength of the US economy and the US dollar have improved the inbound freight market in recent years. However, this may be offset by the weakening in the dollar although the recently-agreed US tax reform bill may help to support freight volumes in the period ahead. Seasonally-adjusted volumes are broadly trending sideways.
