Global Air Cargo Demand Slowing

Global Air Cargo Demand Slowing

The global air cargo market saw demand grow 3.2 percent in April from a year earlier, but traffic was down from previous months due to a further slowdown in emerging markets, led by China, according to the International Air Transport Association.

Air Cargo Growth vs. Capacity Growth by RegionMiddle Eastern carriers continued to put in the best performance, with capacity rising by double digits and tonnage up nearly 9 percent.

Growth has slipped to a five-month low, with April traffic down 1.1 percent from March and slightly below January, the industry body said in its latest monthly report.

World trade growth has slowed in recent months, but the momentum in the advanced economies remains intact and export orders are rising, which suggest the current sluggish demand likely is temporary, IATA said.

“Trading conditions for air freight are difficult. Overall, business activity and trade have shifted down a gear after a strong end to 2013. And this is taking its toll on growth in the air cargo sector,” IATA Director General Tony Tyler said.

“Developed economies are still maintaining post-recession momentum and the expectation is for a stronger finish to the year,” he said.

Asia-Pacific carriers saw cargo demand grow 5.2 percent year-on-year as capacity increased 7.8 percent, but the gain was exaggerated by comparison with a particularly weak April last year. Ongoing weakness in Chinese manufacturing activity likely will affect demand in the coming months, compounded by the fact that export volumes in emerging Asian markets have been in continuous decline through 2014.

European demand shrank 0.7 percent as trade flows leveled off and the eurozone grew just 0.2 percent in the first quarter. But indicators point to a stronger second quarter.

North American airlines’ traffic grew 2.6 percent, driven by higher exports and imports. Growth likely will be stronger in coming months as business activity picks up.

Middle Eastern carriers continued to put in the best performance, with traffic up 8.7 percent from a year ago though growth is down on recent months.

Latin American traffic declined 6.5 percent, reflecting the slowdown in trade across the region. Demand rose 2.9 percent in Africa but was held back by weakness in key economies, notably South Africa.

Contact Bruce Barnard at brucebarnard47@hotmail.com.