Air freight volumes remained weak in May as the impact of the US-China trade war negatively impacted the industry, according to the International Air Transport Association (IATA).
The association said data for global air freight markets showed that demand, measured in freight tonne kilometers (FTKs), decreased by 3.4 per cent last month, compared to the same period in 2018. This was a slight improvement on the 5.6 per cent contraction in April.
Africa’s FTKs were up eight per cent and Latin America 2.7 per cent, but all other regions saw falls with Asia Pacific down 6.4 per cent and the Middle East 6.9 per cent seeing the biggest declines. Europe fell 0.2 per cent, and North America 1.6 per cent.
In seasonally-adjusted terms, IATA said the level of FTKs increased modestly for the third consecutive month, suggesting that the low point of this cycle may be behind us, although the market remains weak.
Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 1.3 per cent year-on-year in May 2019. Capacity growth has now outstripped demand growth for the 13th consecutive month.
IATA noted air cargo demand has suffered from very weak global trade volumes and trade tensions between the US and China. This has contributed to declining new export orders. The indicator for new manufacturing export orders, part of the global Purchasing Managers Index (PMI), has indicated falling orders since September 2018.
“The impact of the US-China trade war on air freight volumes in May was clear. Year-on-year demand fell by 3.4%. It’s evidence of the economic damage that is done when barriers to trade are erected. Renewed efforts to ease the trade tensions coming on the sidelines of the G20 meeting are welcome.
“But even if those efforts are successful in the short-term, restoring business confidence and growing trade will take time. And we can expect the tough business environment for air cargo to continue,” said Alexandre de Juniac, IATA’s director general and CEO.