The International Air Transport Association (IATA) released data on global air cargo markets showing that demand has increased significantly, up 10.4% in the first half of 2017 compared to the first half of 2016. For the first time since the downturn in the air cargo markets during the global financial crisis of 2010, such a strong growth in the first half of the year was noticed. The average growth rate in the industry, which is 3.9% over the past five years, has been exceeded by almost three times.
In the first half of 2017, the carrying capacity increased by 3.6% compared to the first half of 2016. Demand growth continues to outpace growth in carrying capacity, which is a positive feature.
The strong performance of air cargo in the first half of 2017 is confirmed by the data for June. Demand growth increased by 11% in June compared to last year. Carrying capacity – by 5.2%. The robust growth in demand for air cargo is in line with positive developments in global trade, with export orders around the world close to a six-year peak. Global indicators of the ratio of stocks and sales have stopped their decline. This means that the period in which companies try to quickly replenish stocks (which often contributes to the growth of air cargo volumes) is coming to an end. Despite this trend, in general, forecasts for the development of the air cargo industry are optimistic: demand will grow in the third quarter of this year at a rate of 8%.
“Air cargo is taking off high thanks to the tailwinds of a stronger global economy. Demand is growing at such a high rate for the first time since the global financial crisis. And this is great news after years of stagnation. But more importantly, the industry is capitalizing on this momentum to accelerate much-needed upgrades and improve the quality of service provided to its many customers,” said Alexandre de Juniac, CEO and CEO of the International Air Transport Association (IATA).
Regional indicators
The first half of 2017 saw positive growth in air cargo across all regions.
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- Asia-Pacific carriers reported a 10.1% increase in air cargo volumes in June 2017 compared to June 2016, and a 7.8% increase in capacity. Demand growth has reached the highest levels, 13-15%, on international routes in Asia, as well as between Asia and Europe. Carrying capacity in the region increased by 4.8% in the first half of 2017
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- North American carriers reported a 12.7% increase in air cargo volumes in June 2017 compared to June 2016, and a 3% increase in capacity. Carrying capacity in the region increased by 1.5% in the first half of 2017, while demand showed an extraordinary growth of 9.3%.
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- European carriers reported an increase in air cargo volumes by 14.3% in June 2017 compared to June 2016, and capacity by 6.1%. Carrying capacity in the region increased by 5.4% in the first half of 2017, while demand increased by 13.6%. The weakening of the euro continues to play into the hands of the European freight market, providing strong export orders.
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- Middle East transport companies reported an increase in air cargo volumes by 3.7% in June 2017 compared to June 2016, carrying capacity – by 2.2%. Carrying capacity in the region increased by 1.5% in the first half of 2017, and demand by 7.6% (below the average for the past five years). The slowdown is due to high competition from carriers from other regions, especially those operating on Asia-Europe routes.
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- Latin American carriers reported an increase in air cargo volumes of 9.8% in June 2017 compared to June 2016, and capacity growth of 2.9%. Carrying capacity in the region decreased in the first half of 2017 by 0.6%, while demand fell by 0.3%. The region continues to struggle due to difficult economic and political conditions, in particular due to problems in the region’s largest economy, Brazil.
- African transport companies show the fastest growth among regions: demand growth – up to 31.6% in June 2017, carrying capacity – by 7.6%. Carrying capacity in the region increased by 11.2% in the first half of 2017, while demand increased by 25.9%. A strong recovery on trade routes to Asia contributed to an extraordinary increase in demand for air cargo during the five months of 2017. Seasonal growth has leveled off, but the trend of rapid growth will continue until the end of the year.
The International Air Transport Association (IATA) represents 275 airlines worldwide, accounting for up to 83% of global air travel. The Association acts as a coordinator and representative of the interests of the air transport industry in such areas as ensuring flight safety, flight operations, tariff policy, maintenance, aviation security, development of international standards, etc.
According to the IATA website.