The demand for air freight markets, measured in freight tonne kilometers (FTKs), contracted by 3.9% in August 2019, when compared to the same period in 2018.
This marks the
tenth consecutive month of year-on-year decline in freight volumes, the longest
period since the global financial crisis in 2008.
According to the data released by the
International Air Transport Association, freight capacity, measured in
available freight tonne kilometers (AFTKs), rose by 2% year-on-year in August
2019. Capacity growth has now outstripped demand growth for the 16th
consecutive month.
Air cargo continues to face strong headwinds
from the intensifying trade war between the US and China, as well as weakness
in some of the key economic indicators and rising political uncertainties
worldwide. Global trade volumes are 1% lower than a year ago.
Trade in emerging countries has been
underperforming that of advanced nations throughout most of 2019. This is due
to higher sensitivity of the emerging economies to trade tensions, rising
political instability and sharp currency depreciation in some of the key
emerging markets.
Global export orders continue to fall. The
global Purchasing Managers Index (PMI) remains in contraction territory. Its
tracking of new manufacturing export orders has pointed to falling orders since
September 2018. And for the second month in a row, all major trading nations
reported falling orders.
“The impact of the US-China trade war on air
freight volumes was the clearest yet in August. Year-on-year demand fell by
3.9%. Not since the global financial crisis in 2008 has demand fallen for 10
consecutive months. This is deeply concerning. And with no signs of a détente
on trade, we can expect the tough business environment for air cargo to
continue. Trade generates prosperity. Trade wars don’t. That’s something
governments should not forget,” said Alexandre de Juniac, IATA’s Director
General and CEO.
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