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IATA warns of airfreight “peak”

GENEVA: September 06, 2017. IATA reports an 11.4 percent increase in freight tonne kilometers (FTKs), in July over the same period a year ago.

The association said July's year-on-year rise is nearly four times higher than the 10 year average growth rate of 3.1 percent and the fourth time in five months of double-digit annual growth.

DHL CVG hubCapacity grew by 3.7 percent in the same period to have a positive impact on airline yields - consistent with an uptick in global trade, rising export orders and upbeat business confidence indicators, said IATA.

There are, however, signs that demand growth for air freight may be nearing a peak as seasonally-adjusted airfreight volumes remained flat in June and fell in July.

"July was a strong month for air cargo with double-digit growth. And for the third consecutive month demand for air freight grew at a faster pace than demand for air travel," said Alexandre de Juniac, IATA's director general and CEO. "While the outlook for the rest of the year remains positive, there are signs that the cyclical growth period may be nearing a peak," he warned.

According to IATA economist David Oxley, airfreight demand indicators are becoming less supportive for freight growth, particularly business confidence: "To be clear, the new export orders component of the global PMI remains close to a six-year high and, crucially, is still well above the notional 50-mark that indicates growing export order books. However, the indicator has broadly tracked sideways so far this year.

"Given the strong relationship between year-on-year changes in the indicator and industry-wide FTK growth, recent developments are consistent with a moderation in year-on-year air freight growth towards the end of the year," he continued.

(Pictured: Cincinnati/Northern Kentucky International Airport (CVG) reported an 8.8 percent year-on-year increase in air cargo traffic to 205,000 tons for the first quarter of 2017. DHL has invested US$280 million in its CVG hub and now employs 3,000 people. Meanwhile Amazon is investing US$1.5 billion to build a 900-acre air hub for 100 aircraft and employ 2,700 people in a new three million sq.ft. facility.)

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