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January 2019 IATA Air Freight Market Analysis
Air cargo volumes begin 2019 on a weak note

Highlights of the January 2019 Air Freight Market Analysis

  • Industry-wide freight tonne kilometres (FTKs) began the new year 1.8% lower than their level of January 2018. This represents the slowest annual rate of growth in around 3 years. 
  • Air freight capacity has shown solid growth over the past 12 months, rising by 4.0% in year-on-year terms. The freight load factor is now a sizeable 2.7 percentage points lower than a year ago. 
  • A slowing in freight demand growth was expected in 2018 following the temporary boost from the inventory restocking cycle in 2017, however the industry is also feeling the impact of the increasing headwinds to freight demand from the softness in global trade and economic indicators.

African growth remains moderately positive
Following a sustained period of negative annual growth rates, January saw Africa register a second consecutive positive rate. International FTKs are up a modest 1.3% year-on-year. A steady, if unspectacular, upwards trend in SA outcomes has been in place for around 6 months now, notwithstanding a short-lived pause in late 2018. This is starting to be reflected in the annual calculations. With a strong surge in freight volumes in late 2016 and into 2017 that was only partly unwound last year, international FTKs for the African carriers are more than 35% higher than their level of three years ago.

Air cargo volumes are falling

Industry-wide FTK growth started 2019 where it ended last year, on a soft note. Air cargo volumes in January were 1.8% lower than their level of a year ago. This marked the 3rd consecutive month of negative year-on-year growth, and is the slowest pace in three years. We are mindful that the start of the year can bring more than the usual volatility. 

   We could find no evidence that the two-week difference in the timing of the Chinese New Year in February affected the growth rates. The emerging trend in the data is clear. In seasonally-adjusted terms – where we try to remove the regular data volatility – seven of the past 12 months have recorded a decline.

   We have noted previously that some of this softness was to be expected following the temporary surge in activity from the global inventory restocking cycle, which drove a very strong rate of FTK growth in 2017. However, this does not appear to explain the extent of the recent weakness in FTK outcomes. At a regional level the deterioration in growth outcomes is widespread.

Signs of weakness in trade and leading indicators…

The loss of upwards momentum and subsequent declines in the seasonally adjusted FTK series from around mid-2018 also reflects the increasing headwinds to freight demand from the weakness observed in global trade and economic indicators and some of the key air freight demand drivers...Download the full document here. 

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