Global air freight capacity growth outstripped demand growth for the fourth month in a row in May, the International Air Transport Association (Iata) reports.
Market demand, measured in freight tonne kilometers (FTKs), rose 2.4% year-on-year in May – slightly down from the 5.2% year-on-year growth recorded in April.
Freight capacity, measured in available FTKs, meanwhile, grew by 6.2% year-on-year in May.
“After a weak start to 2018, demand for global air freight has now resumed a modest trend upwards. However, the rapid growth seen in 2017 is now over, with demand growing at a significantly slower pace in 2018.
“In Iata’s mid-year industry outlook, 2018 freight growth was revised downwards to 4% from the previously forecasted 4.5% in December,” the association said.
The three indications that growth will continue at a slower pace are that the restocking cycle, which required quick delivery to meet customer needs, is over; the new export orders component of the global manufacturing Purchasing Managers’ Index is at a 21-month low; and global trade appears to be softening as trade tensions increase.
“We still expect demand to grow, but those expectations are dampened with each new tariff introduced. Experience tells us that trade wars, in the long run, only produce losers,” Iata director-general and CEO Alexandre de Juniac says.
All regions except Africa reported an increase in demand growth in May.
African carriers saw freight demand contract by 2% year-on-year in May, while capacity increased by 20.4%.
After a surge in international FTK volumes last year, seasonally-adjusted international freight volumes have now trended downwards at an annualised pace of 15% over the past six months, Iata notes.
This mainly reflects a softening in demand on markets to/from Asia and the Middle East.