IATA Reports Air Cargo Up in May, but Signals Growth Could Have Peaked
The International Air Transport Association (IATA) has released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), grew 12.7% in May 2017 compared to the year-earlier period. This was up from the 8.7% annual growth recorded in April 2017 and is more than three times higher than the five year average growth rate of 3.8%. Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 5.2% year-on-year in May 2017.
The continued growth of air freight demand corresponds to the improvement we’ve seen in world trade. However, IATA says some signs are showing that the cyclical growth period may have peaked. For example, the global inventory-to-sales ratio has started rising. This indicates that the period when companies look to re-stock inventories quickly, which often gives air cargo a boost, has ended. Regardless of these developments, the outlook for air freight is optimistic with demand expected to grow at a rate of 8% during Q3 2017.
“May was another good month for air cargo. Demand growth accelerated, bolstered by strong export orders. And that outpaced capacity growth which should be positive for yields. But the industry can’t afford to rest on its laurels. With indications that the cyclical growth period may have peaked, the onus is on the industry to improve its value proposition by accelerating process modernization and enhancing customer-centricity,” said Alexandre de Juniac, IATA’s Director General and CEO.