News & Industry Affairs/IATA news
January 2018 IATA Air Freight Market Analysis
Growth in air freight volumes makes a robust start to 2018
Chinese New Year can distort things at year-start
Industry-wide FTKs increased by 8.0% year-on-year in January 2018, up from 5.8% in December.
As always, the shifting timing of Chinese New Year can
distort annual growth rates at the start of each year.
We will have to wait until we have February data to get
a more complete picture of the strength of freight
demand during the opening months of 2018.
Demand drivers remain supportive…
The demand drivers of air freight remain supportive, with global manufacturers in particular still reporting buoyant demand for their exports.
Moreover, signs of rising bottlenecks in global supply chains should also benefit air freight over other modes of transport. Periods in which global manufacturing firms have reported longer supplier delivery times have been consistent with rising demand for air cargo in the past as firms have turned to the speed of air freight to help recover some of the lost time out of their production processes. This certainly looks to have been a key factor behind the strong pick-up in air freight demand since mid-2016.
…but are currently consistent with solid, rather
than spectacular, year-on-year FTK growth in H1’18
That said, business surveys currently suggest that FTK growth will be solid rather than spectacular in the coming months. Indeed, at current levels, the new export orders component of the global manufacturing PMI is consistent with around 5% FTK growth during H1 2018 – broadly in line with the five-year average pace but around half the growth seen during 2017 as a whole.
Moreover, reports suggest that the current bottlenecks in the global supply chain are most acute in capital goods – particularly steel – which may limit the potential ongoing benefit for air freight operators.
Africa tops the international growth chart again
Despite slowing, African airlines still topped the international FTK growth chart in January for the 16th time in 17 months, with year-on-year growth of 12.9%. As we have noted before, African airlines’ freight volumes have been boosted by a strong upward trend in traffic between Africa and Asia. FTKs flown on this segment grew by 59% year-on-year in 2017, following an increase in the number of direct services between the two continents on the back of ongoing foreign investment flows into Africa from Asia.
Highlights of the January 2018 Air Freight Market Analysis
- While Chinese New Year can distort annual comparisons at the start of each year, industry-wide freight tonne kilometres (FTKs) rose by a robust 8.0% year-on-year in January 2018.
- Demand drivers remain consistent with solid year-on-year FTK growth in H1 2018. However, as we have noted before, the upward trend in seasonally adjusted (SA) demand has slowed since the middle of last year.
- International FTK growth accelerated in annual terms in all regions in January except the Middle East and Africa.
- Demand grew around 2x the pace of capacity in January, which resulted in a further annual rise in the load factor. Download the full document here.