The International Air Transport Association (Iata) has reported that the ongoing and deepening trade war between the US and China has continued to drive air freight demand down. Air cargo is measured in terms of freight (metric) ton kilometres (FTKs). (FTKs are the number of metric tons carried, multiplied by the number of kilometres travelled.)

The association released its latest data on global air freight markets early this month, which covered July. Air cargo demand in July was 3.2% down on the figure for July 2018. This made July the ninth month in a row in which air freight demand was down, year-on-year. “Trade tensions are weighing heavily on the entire air cargo industry,” highlighted Iata director-general and CEO Alexandre de Juniac. “Higher tariffs are disrupting not only transpacific supply chains but also worldwide trade lanes.”

Global trade fell 1.4% year-on-year. Trade between the US and China dropped by 14%, also year-on-year. The global Purchasing Managers Index has reported declining orders since September 2018. Moreover, in July 2019, all major trading nations reported declining orders – the first time this had happened since February 2009.

“While current tensions might yield short-term political gains, they could lead to long-term negative changes for consumers and the global economy,” he warned. “Trade generates prosperity. It is critical that the US and China work quickly to resolve their differences.”

There was, however, good news for Africa. African operators saw their demand increase in July by 10.9% year-on-year. They have been enjoying an upward trend in FTKs since the middle of last year, and July was the sixth month in succession that Africa was Iata’s strongest-performing region. Strong trade and investment connections with Asia were the main factor in this demand growth. African air freight capacity increased by 17% year-on-year.

The only other region to show FTK growth was Latin America, up 3%, largely owing to the recovery of the Brazilian economy. There were, however, concerns about Argentina and some other important markets in the region. (Latin American capacity rose 2.7%.) But Africa accounted for only 1.6% of the global air cargo market and Latin America 2.7%.

The biggest region was Asia-Pacific, with a 35.4% share of global FTKs; it registered a 4.9% fall in July year-on-year. Unsurprisingly, this region has been particularly affected by the US-China trade war. But another factor has been weaker conditions for manufacturers in the region, in general. Because of its weight in global trade, the decline of air cargo in this region was the number one factor in the decline in global air freight. But, while the region’s air cargo traffic had gone down, its air freight capacity went up by 2.5% year-on-year.

North America, the number two region with 23.8% of global FTKs, saw a decline of 2.1%. Although the region had a firm economic background, which supported consumer spending, it was also hit by the trade conflict between the US and China. Air freight demand between Asia and North America fell by nearly 5% year-on-year. Air cargo capacity increased by 1.6%.

Europe, the third-ranked region, with 23.3% of global demand, experienced a fall of 2%, while capacity increased by 4.2% year-on-year. The driving forces behind the decline were weaker conditions for German manufacturing exporters, increased fears of a recession and the ongoing uncertainty around the UK’s withdrawal from the European Union.

The fourth-placed region was the Middle East, at 13.2% of world demand, which suffered a 5.5% drop in demand, the worst fall for any region. The causes were the increasing tensions in, and the deceleration of, world trade; and the restructuring of airlines in the region. (Capacity increased by only 0.2%.)