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October 2018 IATA Air Freight Market Analysis
Cargo volumes trending higher at a moderate rate into Q4

Highlights of the October 2018 Air Freight Market Analysis

  • Industry-wide freight tonne kilometres (FTK) grew by 3.1% year-on-year in October. As we have argued before, the current period of moderate FTK growth is consistent with the typical pattern seen after inventory restocking cycles. 
  • Freight volumes have continued to trend upwards into the traditional period of strong demand during the final quarter of the year. Nonetheless, demand drivers, including consumer confidence, have softened since early-2018. 
  • The industry-wide load factor fell in annual terms for the eighth month in a row in October. Following the recent moderation in the demand trend, capacity is once again trending upwards at a faster annualized pace.

African carriers remain in negative territory
Year-on-year growth in international FTKs flown by African airlines remained in negative territory in October for the seventh time in eight months (-4.0%). The performance reflects weakness on all the main markets to/from the continent. Nonetheless, having reached a trough in June, FTKs have picked up sharply in SA terms in recent months.

Ongoing moderate uptrend in freight volumes…

Industry-wide FTKs increased by 3.1% year-on-year in October – the first of the traditional months of strong demand at the end of the year – up from a (revised) 29-month low of 2.5% reached in September. As we have noted before, the moderation in year-onyear FTK growth that we have seen over the past year or so is typical of the pattern after inventory restocking cycles in the past. Air freight volumes grew much faster than global goods trade in 2017 as firms turned to the speed afforded by air freight to restock inventory levels quickly. However, FTK growth is on track to underperform that of global goods trade in 2018.

Air freight volumes have continued to trend upwards moderately in seasonally adjusted (SA) terms into the final quarter of the year. For example, FTKs have risen at an annualized rate of just under 4% over the past six months. This reflects support from a number of factors including solid investment growth and fast-growing areas such as e-commerce.

…alongside a softening in the demand backdrop

That said, we have continued to see a softening in other key demand drivers. This includes consumer confidence, which remains elevated by historical standards but has fallen since early-2018. Download the full document here. 

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