Air freight growth slows to 22-month low as restocking cycle ends

GENEVA – The International Air Transport Association (IATA) today released data for global air freight markets showing that demand, measured in freight tonne kilometres (FTKs), rose 1.7% in March 2018, compared to the same period the year before. This was five percentage points lower than the February result and the slowest pace of growth in 22 months.

The year-on-year increase in capacity, measured in available freight tonne kilometres (AFTK) fell to 4.4% compared to 6.3% in February. This was the first time in 20 months, however, that annual capacity rose faster than demand.

IATA said the sharp growth slowdown os principally due to the end of the restocking cycle, during which businesses rapidly increased their inventory to meet unexpectedly high demand. A softening of global trade is also evident.

"It’s normal that growth slows at the end of a restocking cycle. That clearly has happened,” said Alexandre de Juniac, IATA’s Director General and CEO.      

 “Looking ahead, we remain optimistic that air cargo demand will grow by 4-5% this year. But there are obviously some headwinds.

“Oil prices have risen strongly, and economic growth is patchy. The biggest damage could be political. The implementation of protectionist measures would be an own-goal for all involved—especially the US and China."

Asia-Pacific carriers reported FTK growth of just 0.7% compared to the same period a year ago. IATA said export orders in Japan and Korea have fallen in recent months and the region remains particularly exposed to the impact of protectionist measures. www.iata.org (ATI).