Weak Air Freight Demand Continues
- Global trade volumes have fallen by 1% over the past year;
- Global economic activity and consumer confidence continue to weaken;
- And the export order component of the global manufacturers Purchasing Managers Index (PMI) has indicated falling global export orders since September 2018.
All regions reported year-on-year demand growth in March 2019, except Asia-Pacific which contracted.
Asia-Pacific airlines saw demand for air freight shrink by 3.4% in March 2019, compared to the same period in 2018. This was a significant improvement from the 12.0% decline in growth from the previous month. Weaker manufacturing conditions for exporters in the region, ongoing trade tensions and a slowing of the Chinese economy impacted the market. Capacity decreased by 1.0%.
North American airlines saw demand increase by 0.4% in March 2019, compared to the same period a year earlier. The recent easing of growth is partly due to a slowing of US domestic economic activity in the later part of 2018 and falling global trade volumes. Despite this, new export orders are rising which would support air cargo growth. Capacity increased by 2.6% over the past year.
European airlines posted a 3.6% increase in freight demand in March 2019 compared to the same period a year earlier. Given the weaker manufacturing conditions for exporters in Germany, and uncertainty over Brexit, March’s performance represents a positive outcome. Capacity increased by 6.4% year-on-year.
Middle Eastern airlines’ freight volumes increased 1.3% in March 2019 compared to the year-ago period. Capacity increased by 3.8%. A clear downward trend in seasonally-adjusted international air cargo demand is now evident with weakening air freight volumes to/from North America and to/from Asia Pacific contributing to the softer performance.
Latin American airlines experienced an increase in freight demand growth in March 2019 of 3.6% compared to the same period last year and capacity increased by 16.9%. The emergence of the Brazilian economy from recession is supporting a resurgence in air cargo demand. Nevertheless, ongoing economic and political uncertainties in various parts of the region continue to present challenges for the industry.
African carriers posted the fastest growth of any region in March 2019, with an increase in demand of 6.0% compared to the same period a year earlier. Seasonally-adjusted international freight volumes are lower than their peak in mid-2017; despite this, they are still around 30% higher than their most recent trough in late-2015. Capacity grew 15.2% year-on-year.
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