Air Freight Markets in Modest Slowdown in April

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Air Freight Markets in Modest Slowdown in April

Global air freight markets registered a “modest slowdown” last month in the wake of economic recession in developed countries, although industry members expect a “stronger finish” for 2014.

“Trading conditions for air freight are difficult. Business activity and trade have shifted down a gear after a strong end to 2013. And this is taking its toll on air cargo growth,” explained Tony Tyler, International Air Transport Association (IATA)’s Director General and CEO.

Global air freight demand (measured in Freight Tonne Kilometers or FTKs) was 3.2% above previous year levels. However, demand has not grown in recent months. Traffic levels in April were slightly below those of January and 1.1% lower than what was recorded in March.

Global air freight at discount prices

Latest data show that prior improvements in the demand environment are experiencing some reversal.

Largely as a result of further slowdown in the emerging markets, mostly China, indicators of business confidence slipped further in April. Levels still point toward growth, but at the weakest pace for the past five months. World trade growth has also slowed over recent months.

Still, momentum in advanced economies remains intact and export orders still point to expansion. This suggests that current sluggishness in the demand drivers is likely temporary.

Overall, cargo demand in the Asia-Pacific region grew by 5.2% year-on-year. Yet, the strength of this performance was exaggerated by a comparison to a particularly weak April 2013.

Ongoing weakness in Chinese manufacturing activity is likely to impact on air freight demand in coming months, and export volumes in emerging Asian markets have been in continuous decline throughout 2014. Capacity rose 7.8%

European airlines saw demand for air cargo fall by 0.7% compared to April 2013, as trade activity leveled off. GDP growth in the Eurozone was just 0.2% in the first quarter. However, indicators look positive for a stronger second quarter. Capacity was up just 0.2%.

North American carriers posted year-on-year growth in demand of 2.6%. The latest data show a rebound in trade volumes to and from the US and underlying growth trends in business activity are positive. This could boost air freight growth in future months. Capacity was down 0.8%.

Free Freight Quotes

Middle Eastern carriers reported that air cargo demand expanded 8.7% compared to the previous April. This is slightly slower growth compared to previous months, but still easily the strongest growth of any region. Carriers are benefitting from the upswing in developed economies, and increased volumes from emerging markets in Asia and Africa. Capacity was up 8.1%.

Latin American airlines suffered a fall in cargo demand of 6.5% compared to April 2013. Trade volumes in the region have slowed in recent months, reflecting a wider ongoing emerging market malaise. Capacity also fell, but by only 0.5%.

African airlines saw air cargo demand grow by 2.9%. Further growth was held back by weakness in key economies in the region, such as South Africa. Capacity rose by only 1.1%

By | 2015-12-06T21:49:16+00:00 May 30th, 2014|News, Shipping, ssk|0 Comments

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