IATA numbers show air freight demand for September slows but still up 9.2%
According to the data for global air freight market released by the International Air Transport Association (IATA) for the month of September 2017, the demand, measured in freight tonne kilometers or FTKs, rose 9.2 percent compared to the same month in 2016. This was the slowest pace of growth seen in five months. However, it was still significantly higher than the five-year average growth rate of 4.4 percent.
Freight capacity, measured in available freight tonne kilometers or AFTKs, rose by 3.9 percent compared to September of last year – less than half the pace of demand growth. This is positive for industry load factors, yields, and financial performance.
It appears that the industry has passed a cyclical growth peak. The upward trend in seasonally-adjusted freight volumes in Q3 has eased and the inventory-to-sales ratio in the US is now trending sideways. This indicates that the period when companies look to restock inventories quickly – which often gives air cargo a boost—has ended.
“Demand for air cargo grew by 9.2 percent in September. While that’s slower than in previous months, it remains stronger than anything we have seen in recent memory. But there are signs that this demand spurt may have peaked. So it becomes even more important to reinforce the industry’s competitiveness by accelerating the modernization of its many antiquated processes,” said Alexandre de Juniac, IATA’s Director General and CEO.
With year-to-date demand growth of 10.1 percent, the IATA forecast of 7.5 percent growth in air freight demand for 2017 appears to have significant upside potential even if the peak of the economic cycle has passed.
The IATA data shows airlines in all regions reported an increase in year-on-year demand in September.
African airlines topped the international FTK growth chart once again in September, with annual growth of 18.1 percent. Despite slowing from August, this was still more than twice the five-year average pace (8.9 percent). The pick-up in African airlines’ freight volumes has been helped by a surge in traffic between Africa and Asia; while still a comparatively small market, FTKs flown on the segment have surged by more than 67 percent in the first eight months of the year.
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International FTKs flown by airlines based in Asia Pacific – who fly nearly 40 percent of total international volumes – grew by 10.1 percent year-on-year in September. Cargo demand growth has been strong on all the major routes to, from and within the Asia Pacific region.
The recovery in Latin American FTKs continued into Q3, alongside ongoing signs of a corresponding pickup in the region’s largest economy, Brazil. The region’s airlines flew 8.6 percent more international FTKs in September 2017 than they did a year ago. Given the region’s difficulties in recent years, September’s growth rate was well above the five-year average pace (0.1 percent).
