By Samson Echenim
Global airfreight demand measured in freight tonne kilometers (FTKs), decreased by 3.4 percent in May 2019, compared to corresponding period of 2018, the International Air Transport Association (IATA) has said, noting that this was a slight improvement on the 5.6 percent contraction in April.
Warning that the trend would continue, IATA blamed US-China trade war for the decrease, terming them as a clear damage to the economy occasioned by barriers to trade arising from the two countries.
“The impact of the US-China trade war on air freight volumes in May was clear. Year-on-year demand fell by 3.4 percent. It’s evidence of the economic damage that is done when barriers to trade are erected. Renewed efforts to ease the trade tensions coming on the sidelines of the G20 meeting are welcome, but even if those efforts are successful in the short-term, restoring business confidence and growing trade will take time. We can expect the tough business environment for air cargo to continue,” said Alexandre de Juniac, IATA’s director general and CEO.
In seasonally-adjusted terms, the level of FTKs increased modestly for the third consecutive month, suggesting that the low point of this cycle may be behind us, although the market remains weak.
Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 1.3 percent year-on-year in May 2019. Capacity growth has now outstripped demand growth for the 13th consecutive month.
Air cargo demand has suffered from very weak global trade volumes and trade tensions between the US and China. This has contributed to declining new export orders. The indicator for new manufacturing export orders, part of the global Purchasing Managers Index (PMI), has indicated falling orders since September 2018.