IATA says airfreight capacity rose faster than demand in March for the first time in 20 months. Demand rose 1.7 percent year-on-year, a drop of 5.0 percent over February, to produce the slowest growth in 22 months. The increase in global capacity fell to 4.4 percent from 6.3 percent in February.
As forecast last month, IATA says the slowdown is due to the end of an inventory restocking cycle coupled with a “softening” of global trade.
“We would caution against reading too much into the softening in seasonally adjusted volumes in recent months as yet,” said IATA economist David Oxley. “We continue to expect freight-tonne kilometres to grow in the region of 4-5 percent in 2018. However, the bigger picture is that the recent period of airfreight outperformance looks to be firmly behind us.”
Airlines in all regions except Latin America reported year-on-year declines, with Africa falling 3.4 percent after reporting the fastest growth for 17 of the last 18 months; Asia-Pacific carriers produced growth of just 0.7 percent; European airlines’ traffic rose 1.0 percent as the € gain against the US$; Latin American airlines by comparison saw a 15.5 percent growth in volumes, in part due to an improved Brazilian economy; a growth of 0.8 percent by Middle East carriers in March was consistent with a “general weakening” over recent months; and North American airlines produced a 3.9 percent rise in traffic – although the US inventory-to-sales ratio rise in 2018 suggests an airfreight boost from restocking is over, says the Association.
“It’s normal that growth slows at the end of a restocking cycle. That clearly has happened. Looking ahead we remain optimistic that air cargo demand will grow by 4-5 percent this year,” added IATA director general and CEO Alexandre de Juniac.
“But there are obviously some headwinds,” he added. “Oil prices have risen strongly, and economic growth is patchy. The biggest damage could be political. The implementation of protectionist measures would be an own-goal for all involved—especially the US and China.”