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October 2017 IATA Air Freight Market Analysis
Air freight volume growth makes a robust start to Q4

A robust start to Q4 for FTK growth…
Industry-wide freight tonne kilometres grew by 5.9% year-on-year in October – the first month of the traditional period of strong demand seen every Q4.

As has consistently been the case over the past year or so, the latest growth rate was some way above its five and ten year average rates (4.6% and 3.2%, respectively). Moreover, reports from the industry indicate that demand and yield conditions have been very strong in November too. All told, air freight volumes remain on course for their strongest year of growth since the post-crisis rebound in 2010.

...although the strong SA trend has moderated

That said, the October data added to signs that the cycle in air freight growth peaked earlier in the year. Indeed, October’s growth rate was less than half of that in March (13.4%), and was the slowest since January. More generally, the upward trend in SA cargo volumes has clearly eased over the past six months or so.

The FTK growth cycle may have peaked…
As we have argued for some time, the passing of the cyclical growth peak has been well signaled by industry drivers, particularly the new export orders component of the global Purchasing Managers’ Index (PMI).

To be clear, this indicator remains well above the notional 50-mark that indicates growing export order books, which is consistent with further increases in global trade volumes. However, the fact that the PMI component is currently trending broadly sideways is consistent with the moderation in FTK growth that we are currently seeing.

Highlights of the October 2017 Air Freight Market Analysis

  • Global freight tonne kilometres (FTK) rose by 5.9% year-on-year in October – the first month of the traditional strong period for demand seen every Q4. Industry-wide FTK growth remains well above its five and ten-year average rates.
  • Reports from the industry indicate that freight demand has been very strong in November too, amid tight supply conditions. However, our data continue to suggest that the current FTK growth cycle peaked earlier this year.
  • International FTK growth slowed in year-on-year terms in all regions in October with the exception of Africa.
  • Year-on-year capacity growth lagged behind that of demand in October for the 15th month in a row. Download the full document here. 

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