The International Air Transport Association has reported that year-on-year air freight growth, measured in freight ton kilometres (FTKs), made a strong start during the first quarter of this year, amounting to an 8.2% increase.
“Business surveys point to another quarter of robust annual FTK growth in the second quarter (Q2)”, stated the association’s ‘Cargo Chartbook Q1 2017’ report. Indeed, air freight volumes have been increasing for the past nine months, as the global economy and trade have improved. In fact, air cargo growth has outperformed total global trade growth.
“European and Asian carriers have driven the bulk of growth,” observed the report. “Traffic growth has been fastest on international segment-based routes within Asia, as well as between Asia and Europe. Demand conditions across the Pacific have weakened over the past quarter, and broader momentum in FTKs has slowed. “However, it is worth noting that there were a lot of complicating factors at this time of year, including Chinese New Year, as well as the fact that 2016 was a leap year.”
The improvement in the global air freight market is driven by the recovery in the global market. Trade conditions have improved, especially for emerging economies.
The rise in consumer confidence has been particularly strong. New export orders for manufacturing industries are still close to a six-year high. As a consequence, FTK growth during Q2 of this year is expected to be 7.5%.
Air freight capacity has continued to increase, but the major part of this is in the form of cargo hold capacity on wide-body airliners, not dedicated cargo aircraft. Nevertheless, the use of large freighter aircraft continued to increase into this year, and there has been a recovery in the air cargo load factor.
On the costs side, crude oil prices trended up during last year and are now around $55/bl. However, this is the same level as during the period 2011 to 2014 and they are forecast to rise only slowly. And the declining trend in air freight yields has stabilised.
In quarter-on-quarter terms, Q1 of this year saw a 1.3% rise in FTKs over the last quarter of last year. However, the previous two quarters enjoyed quarter-on-quarter growth rates of 2.3% and 3.5% respectively. Thus, the rate of growth has slowed.
“The pick-up in industry FTKs over the past year or so has seen airfreight gain market share relative to wider world trade volumes since the middle of 2016,” noted the report.
MIKE OCHONMA
