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December 2017 IATA Air Freight Market Analysis
Air freight volumes post their strongest year of growth since 2010

Strongest year for air freight growth since 2010…
Industry-wide FTKs grew by 9.0% year-on-year in 2017 as a whole, up from 3.6% in 2016 and the strongest calendar-year of growth since 2010. The result was set against a broader pick-up in world trade conditions over the past 18 months or so. Indeed, 2017 was also the strongest year of global goods trade growth since 2011.

…outperforming world trade by a large margin

That said, FTKs grew more than twice as fast as global trade volumes during the year as a whole – the widest margin of outperformance since 2010.

This outperformance largely reflects an improved business environment for manufacturing businesses, who enjoyed buoyant demand for their exports, linked to the global restocking cycle and a long-awaited pickup in investment. On average, we estimate that every 1-point year-on-year increase in the new export orders component of the global manufacturing Purchasing Managers’ Index (PMI) is consistent with annual air freight growth outperforming its world trade counterpart by around 0.9 percentage points. Given the magnitude of the increase in the PMI seen last year, this factor explains around half of air freight’s outperformance relative to global goods trade in 2017.  

A number of factors are likely to be contributing to the remainder of the outperformance, including recent strong increases in consumer confidence, along with the impact that growing sectors such as e-commerce and pharmaceuticals are having on air freight growth.

Volumes are trending sideways in SA terms…
Looking more closely at the latest monthly outcome, year-on-year FTK growth slowed to 5.7% in December. This is still a respectable result above the five-year average of 4.7%, but it is less than half the annual growth rates seen during the middle of last year. Moreover, it is important to note that the robust yearon-year growth rates seen in the final third of the year stem from the upward trend in volumes seen in the first 8 months of last year; in fact, freight volumes have now trended sideways in SA terms since August.

Africa tops the international growth chart
African airlines topped the international growth chart in 2017 for only the second time in a calendar year since our series began in 1990 (the other time was in 2010 at the time of the post-crisis rebound). Year-on-year FTK growth surged to 25.2%, up from 3.7% in 2016. As we have noted before, African airlines’ freight volumes has been helped by a strong upward trend in traffic between Africa and Asia. This follows an increase in the number of direct services between the two continents on the back of ongoing foreign investment flows into Africa from Asia; FTKs flown on the segment grew by nearly 64% in year-on-year terms in the first eleven months of the year.

Highlights of the December 2017 Air Freight Market Analysis

  • Industry-wide freight tonne kilometres (FTKs) rose by 9.0% in 2017. Air freight outperformed global goods trade by the widest margin since 2010, driven by the restocking cycle and buoyant demand for manufactured exports.
  • Indicators remain consistent with year-on-year FTK growth remaining at solid rates during H1 2018. However, freight volumes have trended sideways in seasonally adjusted (SA) terms since August.
  • International FTK growth accelerated in annual terms in all regions compared to 2016, most notably in Africa.
  • Demand grew three times faster than capacity in 2017, which drove a further recovery in the freight load factor. Download the full document here. 

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