Middle Eastern carriers saw the strongest growth in air freight in June with demand expanding by 15.3%, and capacity by 19.2%.
Driven by robust economic growth, Middle East carriers saw the strongest growth in freight on demand gains even as global air freight markets recorded a slowdown in June, data from the International Air Transport Association (IATA) said.
According to IATA, global air freight markets reflected a slowdown in growth for air cargo demand in June. Air freight volumes measured in freight tonne kilometres (FTK) rose just 1.2% compared to a year ago. This is consistent with falling trade activity and weaker than expected global growth, IATA noted.
Regional performance varied widely. Asia-Pacific, North American, and Latin American carriers reported year-on-year declines (-0.3%, -3.3%, and -1.6% respectively) while European carriers saw flat markets. This was offset by the strong performance of Middle Eastern (+15.3%) and African (+6.7%) carriers to keep growth in the positive territory.
IATA director general and CEO Tony Tyler said the general trend of a weaker 2015 compared to the previous year can be seen in the half-year data. Air freight markets expanded by 5.8% in 2014; however year-to-date growth for 2015 stands at 3.5%.
Middle Eastern carriers saw the strongest growth with demand expanding by 15.3%, and capacity rose 19.2%. Airlines in the region have pursued a successful hub strategy connecting both long- and short-haul markets.
Although some major economies in the region have seen slowdowns in non-oil sectors, economic growth remains generally robust, which is also helping to sustain demand for air freight. Growth for the year-to-date is running at 14%, IATA said.
Similarly, African carriers experienced growth in demand of 6.7%, and capacity rose by the same amount. The Nigerian and South African economies have underperformed for much of the year so far, however regional trade has held up. Demand growth for the first six months was 4.8%. “The half-year report for air cargo is not encouraging. With growth of just 1.2% over June last year, markets are basically stagnating. Some carriers are doing better than others at picking up the business that is out there. But overall it has been a disappointing first half of 2015, especially considering the strong finish to 2014. The remainder of the year holds mixed signals,” Tyler said.
He added: “The general expectation is for an acceleration of economic growth, but business confidence and export orders look weak. Air cargo and the global economy will all benefit if governments can successfully focus on stabilising growth and stimulating trade by removing barriers.”
In Asia-Pacific, carriers saw a fall in FTKs of 0.3% in June, and capacity expanded 4.0%. The region has experienced a notable slowdown in imports and exports over recent months, and latest data shows emerging Asia trade activity down 8%. Growth for the year-to-date was 5.4%. In addition to generally weak trade growth, the region is the most exposed to the Chinese market where government policies are more focused on stimulating domestic markets.
European carriers reported flat demand in June (0.0%), compared to a year ago and capacity rose 2.2%. Improvements in eurozone business confidence have not led to increased air freight demand, and consumer confidence has been hit by the Greek crisis. Growth for the year-to-date was -0.6%, IATA said.
North American airlines saw a decline of 3.3% year-on-year and capacity grew 2.8%. The positive impact of a modal shift to air as a result of the West Coast ports strike has faded and economic performance, despite some improvement in the second quarter, is subdued. Growth for the first six months of the year was -0.4%.
IATA added that Latin American airlines reported a fall in demand of 1.6% year-on-year, and capacity expanded 3.7%. Regional trade activity has grown in the first half of 2015, despite continuing weakness in Brazil and Argentina. But this has not translated into stronger demand for air freight. Growth for the year-to-date was -6.9%.
