Mideast carriers lead freight demand gain in March, says IATA
May 04 2016 11:02 PM
Tyler: Another tough year for air cargo.

By Pratap John/Chief Business Reporter

Middle Eastern carriers reported a 2.4% increase in air freight demand in March compared to a year ago, the International Air Transport Association (IATA) said and noted that this growth, however, was the “slowest” since July 2009.
“This reflects both a slowdown in network expansion by the region’s main carriers over the past six months and weak trading conditions,” IATA said in its latest “Air freight market analysis”. 
The IATA data for global air freight markets for March 2016 showed a 2% drop in volumes measured in freight tonne kilometres (FTKs) compared to the same period last year. 
In contrast, freight capacity (measured in available freight tonne kilometres or AFTKs) rose by 6.9%, putting increased pressure on already struggling yields.
The weak results reflect subdued growth in world trade, exaggerated by the comparison to a particularly strong start to 2015 when air freight volumes were boosted by the effects of the US West Coast seaports strike. 
The most significant fall in demand was reported by carriers in Asia-Pacific and North America.  Combined they account for around 60% of global freight traffic and reported declines of 5.2%, and 1.8%, respectively. 
IATA Director General and CEO Tony Tyler said, “It is shaping up to be another tough year for air cargo. February 2016 world trade volumes were only 0.4% higher than at the end of 2014. And the expectations of purchasing managers give little optimism for an early uptick. The combination of fierce competition, capacity increases and stagnant demand makes this a very difficult environment in which to generate profits.” 
Even if FTKs grow in line with their five-year average rate of around 1.5% over the rest of this year, given the poor start, overall volumes would still only expand by 0.6% in 2016 as a whole, IATA said. 
While Middle Eastern airlines led the way in terms of annual growth in Q1, there were clear signs of weakness here too. Annual growth in Q1 was just half the pace of that during the same period last year, and the strong upward trend in Middle Eastern FTKs that was the norm from the start of 2009 onwards has weakened markedly. 
At only 2.5% in March, annual FTK growth was the slowest since July 2009. “This coincides with a marked slowdown in annual network expansion growth by the main carriers in the region over the past six months or so, but is also indicative of the broader weak patch in the industry,” IATA said.

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