Traffic, measured in freight tonne kilometers, rose 2.7 percent year on year, good for a 4.7 percent first-half growth rate — but that’s less than half the seven-year high of 10.4 percent in the same period in 2017, according to the International Air Transport Association (IATA).
Freight capacity rose 4.1 percent in June, outstripping demand growth for the fourth consecutive month.
A decline in global trading conditions
The slower growth is due to the end of the inventory restocking in early 2018 and the decline in global trading conditions, indicated by the fall in the Purchasing Managers' Index to its lowest level since 2016, with factory export orderbooks turning negative in China, Japan, and the United States, IATA said.
Also, the temporary grounding of the Nippon Cargo Airlines fleet in the second half of June exaggerated the slowdown by shaving up to 0.5 percentage points off the monthly growth.
The Japanese airline grounded its entire fleet of 11 Boeing 747 freighters after a government inspection identified an “inappropriate maintenance record.” Flights resumed on July 5.
“Air cargo continues to be a difficult business with downside risks mounting. We still expect about 4 percent growth over the course of the year. But the deterioration in world trade is a real concern,” said Alexandre de Juniac, IATA’s director general and CEO.
Global air cargo traffic increased 9 percent in 2017.
‘Trade wars never produce winners’
“While air cargo is somewhat insulated from the current round of rising tariff barriers, an escalation of trade tension resulting in a ‘reshoring’ of production and consolidation of global supply chains would change the outlook significantly for the worse,” de Juniac said. “Trade wars never produce winners. Governments must remember that prosperity comes from boosting their trade, not barricading economies.”
Asia-Pacific airlines registered just a 1.5 percent air cargo growth rate in June outpaced by a 5.2 percent growth in capacity. Volume grew 4.6 percent year on year in the first half of 2018 and is expected to post an annual increase of 3 to 4 percent, according to IATA.
North American carriers posted a 3.8 percent increase in June, as capacity rose 3.4 percent with international traffic growing 5.9 percent, making the region the fast-growing market for the first time in two years with the strong dollar and robust growth in the US economy driving inbound shipments.
Growth in North America in the first half was 5.3 percent, second only to the “exceptional” increase of 10.1 percent in Latin America.
European carriers posted a 3.3 percent increase in June, while capacity was up 5.4 percent. Europe’s growth was hurt by a slowdown in export orders. Traffic grew 4.1 percent in the first half.
Middle East carriers’ freight volume increased 3.8 percent in June, an improvement from the 2.7 percent rise in May, but well below the five year-average of 9.5 percent. Traffic was up 4.3 percent in the first half and growth is expected to remain modest in the months ahead.
Africa airlines’ traffic decreased 8.5 percent in June as capacity declined by 1.4 percent and international volume fell by 8.6 percent, the fastest decline in almost nine years.
Contact Bruce Barnard at firstname.lastname@example.org.