Air freight tonne kilometers (FTKs) grew by a strong 8.8% year-on-year in the three months ended October, a slowdown from the seven-year high seen in the previous three months, but still a strong pace by historical standards, according to the latest statistics released by the International Air Transport Association (IATA).
Every region made a positive contribution to annual FTK growth in the three months to October. The slowdown compared to the previous period was driven mainly by airlines based in Europe and Asia Pacific.
IATA said annual growth in freight volumes remains robust on all of the major international market segments, with rates broadly in the region of 10% to 15% year-on-year, led by international freight traffic flown within Asia. Industry reports indicate that demand has been strong in the key final months of the year too.
Stronger economic and trade conditions, including sharp rises in consumer confidence, are expected to support the demand into 2018, even as the boost to air freight from the inventory cycle wanes. Business surveys are consistent with annual FTK growth of just under 7% in the first quarter.
When surveyed in early October, nearly three-quarters of airline heads of cargo expected volumes to rise over the next 12 months. The survey respondents were also increasingly confident about the outlook for yields over the period.
Cargo yields rose by 13.1% year-on-year in October 2017—the fastest pace in seven years. More favorable supply and demand dynamics have helped to drive cargo yields upwards, and to offset some pressure from rising fuel costs.
Meanwhile, daily utilization rates of large freighter aircraft have increased throughout 2017, and are currently at their highest level since 2012, noted IATA. “Increased utilization will help to further reduce unit costs, and to reinforce the backdrop for financial performance.”
Air freight has outperformed wider goods trade since the start of 2016. “This is consistent with the typical pattern seen during upturns in the economic cycle, although the growing importance of e-commerce may also be a factor at play,” said the association.
There is a wide range in cargo throughput performance at an airport level in recent months, with no clear geographic pattern evident. Shanghai posted the fastest growth (10.9%), but Los Angeles and Abu Dhabi are both in negative territory.
The pick-up in global trade conditions has continued: world trade volumes grew by 5.1% year-on-year in the third quarter of 2017—the fastest pace since early 2011. This has been supported by stronger trade for both advanced and emerging economies.
The new export orders component of the global Purchasing Managers Index has increased in recent months, taking it to highest level since March 2011. The indicator is currently consistent with year-on-year FTK growth of 6.9% in the first quarter of 2018, said the report.
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