Air freight volumes went backwards in May as economic jitters and political uncertainty stymied efforts to boost global trade and excess capacity pressured yields, new figures show.
The International Air Transport Association (IATA) said freight tonne kilometres (FTK) fell 0.9 per cent in May, compared with the prior corresponding period.
And with capacity, measured by available freight tonne kilometres (AFTK), rising by 4.9 per cent in the month, IATA said yields remained under pressure. Freight load factors dropped to 41.9 per cent in May – a record low for the month and down 1.7 percentage points from a year ago.
Although there were signs of encouragement towards the end of 2015, that positive momentum in air freight had slowed at the start of 2016 amid weakness in global trade growth.
This was highlighted by global trade volumes falling in the first quarter of 2016 for the first time since the end of 2009.
IATA director general and chief executive Tony Tyler said the sluggish state of the cargo market looked set to continue for the period ahead.
“Global trade has basically moved sideways since the end of 2014 taking air cargo with it,” Tyler said in a statement on Wednesday (European time).
“Hopes for a stronger 2016 are fading as economic and political uncertainty increases. Air cargo is vital to the global economy. But the business environment is extremely difficult and there are few signs of any immediate relief.”
In terms of the regional picture, Asia Pacific carriers suffered an 0.7 per cent decline in demand, or FTKs, in May, while capacity rose 3.7 per cent. The region was responsible for 40 per cent of all air freight.
“Airlines in Asia-Pacific continue to face headwinds from weak trade in the region and globally,” IATA said.
Freight demand also declined in North America, as the stronger US dollar kept exports from that country under pressure, and was also weaker in Latin America due to the struggling Brazil economy.
On a positive note, air freight demand European airlines rose by 4.5 per cent, while capacity was up 5.7 per cent, reflecting a boost to export orders from Germany over the past few months.
There was also growing demand in the Middle East, with airlines in the region boosting FTKs by 3.2 per cent. However, capacity rose by a far larger 9.5 per cent.
“Despite carriers in the region reporting the fastest growth in aggregate, demand conditions have weakened considerably,” IATA said.
“Annual growth in May 2016 was one-fifth of the pace registered in May 2015. This reflects both an easing in network expansion by the region’s main carriers over the past six months and weak trading conditions.”
There was also moderate growth in demand from airlines in Africa.
“All told, 2016 is shaping up to be another disappointing year for air freight,” IATA said.