In spite of disappointing airfreight figures for July, IATA said it is sticking with its view that “economic growth and trade will improve in the second half of the year,” providing a boost to air cargo volumes. That said, given recent declines in airfreight, there needs to be a significant shift in the second half for growth expectations to be met.
The July report by IATA showed that airfreight volumes were down 0.6 percent, compared to the same time last year. The weakness in the airfreight market is due to declines in trade activity, primarily in emerging markets, such as Brazil and Argentina.
There has been no growth in FTKs since the end of 2014, IATA said; in fact the market was 2 percent smaller in July than it was in December 2014. Carriers in the Asia-Pacific region recorded a 1.9 percent contraction in FTKs in July 2015, year-over-year. The Asia-Pacific region has seen a notable decline in import and export volume so far this year, mostly due to China’s manufacturing sector, which has struggled in recent months. The weakness in export orders has caused some firms to cut employment at the steepest rates since 2009. IATA said recent data points to the slowdown in China to be worse than expected.
European and North American carriers recorded declines of 1.5 percent and 3.7 percent in July, y-o-y, respectively. Although business confidence in Europe has improved, that hasn’t translated to improvement in airfreight. Eastern Europe has seen steep declines, now down 10 percent since the end of the first quarter. North American carriers have seen a drop in FTK volume as well, as freight is going back on sea ships now that the west coast port crisis is over and the aftermath of that labor dispute is smoothing out.
The good news is Middle East carriers continue to grow with an FTK volume rise of 10.8 percent in July, y-o-y. Although major Middle East economies, including Saudi Arabia and the United Arab Emirates, have seen slowdowns in non-oil sectors, the rates of growth remain robust, which should help sustain growth in air freight demand for its carriers, IATA said.