Got invite? Register here | Already member Login here

Air Cargo Posts Strongest First Half-Year Growth Since 2010

Geneva - The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), grew by 10.4% in the first-half of 2017 compared to the first-half of 2016. This was the strongest first half-year performance since air cargo’s rebound from the Global Financial Crisis in 2010 and nearly triple the industry’s average growth rate of 3.9% over the last five years.

Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 3.6% in the first half of 2017 compared to the same period in 2016. Demand growth continues to significantly outstrip capacity growth, which is positive for yields.

Air cargo’s strong performance in the first half of 2017 was confirmed by June’s results. Year-on-year demand growth in June increased 11% compared to the same year-earlier period. Freight capacity grew by 5.2% year-on-year in June.

The sustained growth of air freight demand is consistent with an improvement in global trade, with new global export orders remaining close to a six-year high. However, there are some signs that the cyclical growth period may have peaked. The global inventory-to-sales ratio has stopped falling. This indicates that the period when companies look to restock inventories quickly, which often gives air cargo a boost, may be nearing an end. Regardless of these developments, the outlook for air freight is optimistic with demand expected to grow at a robust rate of 8% during the third quarter of this year.

“Air cargo is flying high on the back of a stronger global economy. Demand is growing at a faster pace than at any time since the Global Financial Crisis. That’s great news after many years of stagnation. And, even more importantly, the industry is taking advantage of this momentum to accelerate much-needed process modernization and improve the value it provides to its many customers,” said Alexandre de Juniac, IATA’s Director General and CEO.

JUNE 2017 % YEAR-ON-YEAR) WORLD SHARE (1) FTK AFTK FLF (%-PT)?2 FLF (LEVEL)?3
Total Market 100.0% 11.0% 5.2% 2.4% 45.0%
Africa 1.6% 31.6% 7.6% 4.8% 26.5%
Asia Pacific 37.5% 10.1% 7.8% 1.1% 55.5%
Europe 23.5% 14.3% 6.1% 3.3% 45.9%
Latin America 2.8% 9.8% 2.9% 2.1% 33.5%
Middle East 13.9% 3.7% 2.2% 0.6% 44.4%
North America 20.7% 12.7% 3.0% 3.1% 36.2%

(1)% of industry FTKs in 2016  (2) Year-on-year change in load factor  (3) Load factor level 

Regional Performance

All regions experienced positive freight growth in the first half of 2017. Carriers in Asia Pacific and Europe accounted for two-thirds of the increase in demand.

Asia-Pacific airlines’ freight volumes grew 10.1% in June 2017 compared to the same period in 2016 and capacity grew by 7.8%. This contributed to a growth in freight demand of 10.1% in the first half of 2017 compared to the first half of 2016. Seasonally adjusted international freight volumes are now 4% above the level reached in 2010 following the global financial crisis bounce-back. Demand growth has been strongest, between 13-15%, on international routes within Asia as well as between Asia and Europe. Capacity in the region increased 4.8% in the first half of 2017.

North American carriers saw freight demand increase by 12.7% in June 2017 year-on-year and capacity increase by 3%. This contributed to strong growth in demand in the first half of 2017 of 9.3% in contrast to the negative growth seen during the same period in 2016. Capacity grew by 1.5% in the first half of 2017. Seasonally adjusted international volumes remain very strong, surging by an annualized rate of more than 30% in the second quarter. The strength of the US dollar continues to boost the inbound freight market but is keeping the export market under pressure.

European airlines posted a 14.3% year-on-year increase in freight demand in June 2017 and a capacity rise of 6.1%. The healthy results helped boost cargo volumes for the first half of 2017 by 13.6%. The ongoing weakness of the Euro persists in boosting the performance of the European freight market which continues to benefit from strong export orders. Capacity in the region increased by 5.4% in the first half of 2017.

Middle Eastern carriers’ freight volumes increased 3.7% year-on-year in June 2017 and capacity increased 2.2%. This contributed to an increase in demand in the first half of 2017 of 7.6%, well below the 10.8% average annual rate seen over the past five years. The slowdown in growth is mainly due to strong competition from carriers in other regions particularly on the Asia-Europe route rather than a significant decrease in demand which has continued to trend upwards at a solid rate of around 10% in annualized terms since early 2017. For the first time in 17 years the region’s share of total international freight flown in the first half of 2017 has fallen. Capacity in the region increased by 1.5% in the first half of 2017.

Latin American airlines experienced a growth in demand of 9.8% in June 2017 compared to the same period in 2016 - the fastest since November 2010 - and an increase in capacity of 2.9%. June’s positive results contributed to the region posting a marginal increase in demand of 0.3% for the first half of 2017. However, seasonally adjusted international volumes remain 10% lower than at the peak in 2014. Capacity fell by 0.6% in the first half of 2017. The region continues to be blighted by weak economic and political conditions, particularly in its largest economy, Brazil.

African carriers had the fastest growth in year-on-year freight volumes, up 31.6% in June 2017 and a capacity increase of 7.6%. This contributed to freight demand growing 25.9% in the first half of 2017 – the fastest of all regions. Demand has been boosted by very strong growth on the trade lanes to and from Asia which have increased by nearly 60% in the first five months of 2017. Capacity grew 11.2% in the first half of the year. Seasonally adjusted growth has levelled off in recent months; however growth is set to remain in double digits for the remainder of 2017.

Leave a Comment

  • It was a refreshing event also from airline prospective in regards to the quality of the delegates gathered from around the globe, the industry expertise in airfreight ,and consequently the buying power such a group of smaller sized market players can bring to a carrier. The innovative approach , linked with a platform of air cargo community tools tool can deliver added value to the supply chain, and differentiate themselves from the mass .We as Air Bridge Cargo are supportive to innovation in our industry to every single customer, and we are looking forward to the positive developments of NAP together with ABC as their carrier.

    Author image
    • Georges Bewer
    • VP EMEA for Airbridge Cargo
  • We as Aerotrans ,are offering neutral freight services to the trade and our customers are airlines , IATA agents and general freight forwarders .Neutral Air Partner is the right platform for our company to explore partnering opportunities with like- minded air cargo experts around the world ,and to develop new services and innovative products for our customers, We are allready seeing the results interacting with a number of members and we look forward to a long term relationship with NAP.

    Author image
    • Michael Jaench
    • Aerotrans Germany
  • Universal Global Logistics, S.A.U., attended the NAP kick off meeting in Abu Dhabi last September. UGL is one of the leading Spanish Freight Forwarders and belongs to Noatum Logistics, the logistics division of Marmedsa Noatum Maritime, present in Spain, Portugal, Turkey, Algeria, Morocco and Chile. “ We had the chance to gather another companies also specialized in airfreight industry, as well as in the different topics which this business include, such as cool chain service, AOG, dangerous goods, etc. As forwarding company we have strong presence in our market, being part of a freight purchasing pool stated in the 3rd position in Spanish IATA ranking , we find NAP network as a chance to develop every kind of air transport business among other specialist companies” says Sergio Escobar –Business and process coordinator for UGL.

    Author image
    • Sergio Escobar
    • Business and process coordinator for UGL.
  • I had the honor of attending the first NAP annual meeting held in Abu Dhabi, the organization, network and the topics addressed, fully satisfied our expectations, our group participated the event with 3 executives and we ve decided to support Neutral Air Partner in nine countries in Latin America where we have our own offices., we are looking forward to grow our air cargo business together with NAP in this new experience “ says Carlos Madama , VP of Grupo RAS - a leading freight & logistics group based in Latin America with 45 offices in 10 countries and 800 members in 5 divisions.

    Author image
    • Carlos Madama
    • VP of Grupo RAS
  • Attending the NAP global meeting in Abu Dhabi has been a great success . It has been a great pleasure to meet so many airfreight professionals whom understand the importance of being Neutral, whilst offering your service towards the forwarding industry.Within 2 months, we already have seen the benefits of our membership , and we are now able to offer more neutral freight services and consolidation solutions to our European customers “ says Ronald Sierat from N.F.S Airfreight ( Neutral Freight Service BV ) a leading and independent neutral airfreight wholesaler & consolidator based at Schiphol airport ( AMS ) main gateway for Europe.

    Author image
    • Ronald Sierat
    • N.F.S Airfreight
  • Summary banner
Close