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August 2017 IATA Air Freight Market Analysis
Another strong month for FTKs, but signs that cyclical peak is near

Yet another month of double-digit FTK growth…
Industry-wide freight tonne kilometres (FTKs) grew by 12.1% year-on-year in August, up from a revised 10.9 % in July, and still well ahead of the five and ten-year average rates (4.4% and 3.2% respectively). Annual FTK growth has now been in double-digit territory for five of the past six months.

…alongside a pick-up in seasonally adjusted traffic

Having fallen modestly in SA terms in June and July, FTKs increased strongly in August. In fact, August saw the strongest month-on-month rise in SA FTKs since January, with volumes still currently trending upwards at a double-digit annualized pace.

As we have noted before, the turnaround in air freight’s fortunes over the past 12-18 months has coincided with a broad-based pick-up in global economic and trade conditions: indeed, data from the Netherlands CPB show that world trade volumes grew by 4.2% so far in the first seven months of 2017 compared to the same period in 2016 – the strongest showing on this basis since 2011. The improvement in trade conditions has also been highly visible in a pick-up in the new export orders component of the global manufacturing purchasing managers’ indices (PMI) . 

Air freight has outperformed wider world trade...
More generally, the recent outperformance of air freight relative to wider world trade remains consistent with the typical pattern seen at the start of upturns in the global economic cycle. This relates in large part to the ability of air freight to allow firms to restock quickly. It is no coincidence to see that the increase in the SA trend in industry-wide FTKs has coincided with a sharp decline in the (US) inventory-to-sales ratio during 2016.

Highlights of the August 2017 Air Freight Market Analysis

  • Global freight tonne kilometres (FTKs) grew at a double-digit annual pace in August for the fifth time in 6 months (1 2.1 % ).
  • Indicators continue to suggest that the cyclical upturn in air freight growth may be nearing a peak. However, with the seasonally-adjusted (SA) traffic trend remaining robust, the data are currently not showing this impact.
  • All regions except Latin America posted double-digit annual international volume growth in August, led by airlines in Africa .
  • Demand in August grew two-and-a-half times faster than capacity, helping to boost the industry-wide load factor . Download the full document here. 

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