The International Air Transport Association (Iata) on Wednesday released its 2018 full year data for global air freight markets, which showed that demand, measured in freight tonne kilometres (FTKs), had grown by 3.5% year-on-year.
This growth, the association said, was significantly lower than the 9.7% growth recorded in 2017.
Freight capacity, which is measured in available FTKs (AFTKs), rose by 5.4% in 2018, outpacing yearly growth in demand. This exerted downward pressure on the load factor, but the yields proved resilient, Iata averred.
Air cargo’s performance in 2018 was sealed by a softening in demand in December, with growth of only 0.5% year-on-year.
Iata said that this “was the worst performance since March 2016”.
Freight capacity, meanwhile, grew by 3.8%, marking the tenth consecutive month that year-on-year capacity growth outstripped demand growth.
International e-commerce grew in 2018, which was a positive factor for the year, Iata added.
Yet, the association pointed out that there was a softening of several key demand drivers, including that of the restocking cycle, during which businesses rapidly built up inventories to meet demand, in early 2018.
Other softening demand drivers include global economic activity having weakened, the fact that the export order books of all major exporting nations, with the exception of the US, contracted in the second half of 2018, as well as consumer confidence having weakened compared with very high levels at the beginning of 2018.
According to Iata director-general and CEO Alexandre de Juniac, air cargo demand lost momentum towards the end of 2018 in the face of weakening global trade, sagging consumer confidence and geopolitical headwinds.
“We are cautiously optimistic that demand will grow in the region of 3.7% in 2019. But with the persistence of trade tensions and protectionist actions by some governments there is a significant downside risk,” he elaborated.
He added that keeping borders open to people and to trade was of critical importance.
“To attract demand in new market segments, the air cargo industry must improve its value proposition. Enabling modern processes with digitalisation will help build a stronger foothold in e-commerce and the transport of time- and temperature-sensitive goods, such as pharmaceuticals and perishables,” De Juniac said.
AFRICA’S PERFORMANCE
According to Iata data, airlines in all regions, with the exception of Africa, reported a yearly increase in demand in 2018.
African carriers’ freight demand decreased by 2.2% year-on-year in December 2018.
This, Iata said, was less than the 9.4% decrease the previous month.
Capacity, meanwhile, increased by 4.9% year-on-year.
Yearly growth in freight demand among Africa carriers in 2018 decreased by 1.3% and capacity grew by 1%.