Echoing similar conclusions made by World ACD, Drewry and the Association of Asia-Pacific Airlines, the International Air Transport Association (IATA) confirmed that evidence of strong air cargo growth in May was no illusion – but may not necessarily be a sign of things to come.
According to IATA’s latest figures, demand for air cargo in May was three times the five-year average, clocking a 12.7 percent growth rate, despite the history of May being a cooling-off period in a typical year for air cargo. This year, May’s growth was up from the 8.7 percent, year-over-year, growth recorded in April 2017.
However, the recent findings have prompted the aviation association to caution that the good times can’t last forever, and that there are “signs that the cyclical growth period may have peaked.”
“The industry can’t afford to rest on its laurels,” warned Alexandre de Juniac, IATA’s director general and CEO. “The onus is on the industry to improve its value proposition by accelerating process modernization and enhancing customer-centricity.”
IATA also noted that continued growth of airfreight demand is consistent with an improvement in world trade. But with new global export orders at a six-year high in May, there are signs that the cyclical growth period may begin to start trending downward. IATA noted that, with inventory-to-sales ratios especially high, companies around the world are unlikely to need as many time-sensitive deliveries – the sort that often travel by air.
Regardless, IATA expects air freight to grow at a “robust” rate of 8 percent during Q3 2017.
With all regions reporting growth in air cargo, the most noteworthy numbers came out of Latin America, where demand, measured in freight tonne kilometers (FTKs), grew by 6.7 percent in May. The region’s economy, and by default the air-freight market, has been in the doldrums for about a decade now, and these latest numbers support anecdotal accounts of improving conditions. IATA also noted that the region’s carriers have adjusted capacity, which has limited the negative impact on the load factor.