IATA January figures point to ‘solid, rather than spectacular’ growth
Airfreight’s dramatic upswing in 2017 makes the year a tough act to follow, and industry data reported by the International Air Transport Association (IATA) indicates 2018 is unlikely to outshine the volume growth of the past year. IATA reported a robust – but not remarkable – industry-wide freight tonne kilometer (FTK) growth rate of 8 percent year-over-year for January, foreshadowing a first-half of 2018 likely to continue slower but steady growth.
IATA attributed the ongoing strong demand in airfreight to the same global economic confidence that the association credited for 2017’s uptick in demand. IATA also noted signs that increasing bottlenecks in global supply chains have been adding additional support to airfreight demand since mid-2016, based on reports of longer delivery times from manufacturing firms – a historical marker of an increase in airfreight demand, as manufacturers resort to airfreight over slower delivery options to prevent lost time in production processes.
International FTKs rose by 8.6 percent in January, with African airlines topping the FTK growth chart at 12.9 percent growth, y-o-y, thanks to strong growth in traffic between Africa and Asia. European airlines were the only other region to report double-digit international FTK growth in January, at 10.6 percent, y-o-y.
As with January results from WorldACD and the Association of Asia Pacific Airlines (AAPA), January’s growth must be taken with a grain of salt until February figures are also released and the impact of Chinese New Year on air cargo traffic is fully understood.
IATA’s more measured outlook on 2018, which was reflected by WorldACD and AAPA in their analysis of January figures, is supported by closer examination of the factors that saw airfreight demand rise in mid-2016. According to IATA, current manufacturing bottlenecks are most severe in capital goods generally and steel in particular, which restricts the potential benefit for airfreight operators.
The positive trend in seasonally adjusted demand has also slowed since 2017. With that in mind, IATA is forecasting industry-wide FTK growth of 4.5 percent for the full year of 2018 – provided the recent decision by the United States to impose tariffs on steel and aluminum products does not spark a global trade war.
