IATA reports double digit airfreight growth in Jul-2017, but cyclical growth may be nearing a peak

5 September, 2017

IATA reported (05-Sep-2017) global FTKs increased 11.4% year-on-year in Jul-2017, the fourth month of double digit growth in the last five months. All regions recorded robust growth and airfreight demand grew faster than air travel demand for the third consecutive month. Growth in Jul-2017 was nearly four times greater than the 10 year average rate of 3.1%. Demand growth continues to significantly outstrip capacity growth, which is positive for airline yields and the industry's financial performance. Growth in demand is consistent with an uptick in global trade, rising export orders and upbeat business confidence indicators, but IATA reported signs that demand growth may be nearing a peak. Seasonally adjusted airfreight volumes were flat in Jun-2017 and decreased in Jul-2017 and the global inventory to sales ratio has stabilised. IATA director general and CEO Alexandre de Juniac commented: "While the outlook for the rest of the year remains positive, there are signs that the cyclical growth period may be nearing a peak". IATA reported the following regional details for Jul-2017:

  • Africa: 33.7% growth in volumes in Jul-2017 was the largest of all regions and the second fastest monthly rise in seven years. Demand was boosted by very strong growth on trade lanes to and from Asia, which increased 80% in Jun-2017 and 65% in 1H2017;
  • Asia Pacific: Demand growth was robust on all major routes to, from and within the region. Seasonally adjusted international volumes fell slightly in Jul-2017 but remain more than 3% above volumes reached following the 2010 post global financial crisis recovery;
  • Europe: Double digit growth in international demand was recorded in nine of the past 11 months, bolstered by strong demand in the Europe-Asia market. Export orders remain strong but recent strengthening of the euro may begin to weigh on exporters;
  • Latin America: Seasonally adjusted international volumes grew strongly in Jul-2017, but remained 9% lower than the peak in 2014. The region continues to be impacted by challenging economic and political conditions, particularly in Brazil;
  • Middle East: Seasonally adjusted international volumes maintained a solid upward trend. Middle East carriers are not seeing as strong a pickup in seasonally adjusted traffic as other regions' carriers due to strong competition, particularly in the Asia-Europe market;
  • North America: Seasonally adjusted international volumes continued a strong upwards trend. The strength of the US dollar boosted the inbound market over the past few years. The US Census Bureau reported a 12.5% increase in air imports to the US in 1H2017. The decline in the US dollar since the start of 2017 is likely to help rebalance trade flows. [more - original PR]