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GENEVA: September 05, 2019 With Trump Administration trade officials due to meet their Chinese counterparts in October, “trade tensions are weighing heavily on the entire air cargo industry,” according to IATA director general and CEO Alexandre de Juniac.

IATA has reported a 3.2 percent drop in airfreight volumes for July, the ninth consecutive month of year-on-year declines, as capacity rose 2.6 percent.

For the first seven months of the year airfreight volumes were 3.5 percent lower than the same period in 2018. With further tariff increases scheduled to come into effect, leading to a more pronounced impact of the US-China trade war, the association says 2019 could be the first year in a decade that the global airfreight market shrinks.

China Airlines B777FBetween January and July, trade volumes between US and China fell 14 percent year-on-year while the new export orders component of the global Purchasing Managers’ Index (PMI) has been below the 50-mark for the last 11 months and eased further in July.

During that month Germany recorded its steepest drop in new export orders since 2009 while in South Korea new export orders fell at their fastest rate in the last six years, indicating a fragile outlook for one of the world’s key air cargo markets says IATA.

“Higher tariffs are disrupting not only transpacific supply chains but also worldwide trade lanes. While current tensions might yield short-term political gains, they could lead to long-term negative changes for consumers and the global economy. Trade generates prosperity. It is critical that the US and China work quickly to resolve their differences,” declared de Juniac.

Meanwhile, looking to the long term, Taiwan’s China Airlines has confirmed its six-airplane order of B777 freighters to replace 747capacity. With a list price of US$2.1 billion, three of the six orders had been announced in July.

"Air cargo is an important part of our overall business and the introduction of these new B777 freighters will play an integral role in our long-term growth strategy," said China Airlines chairman Hsieh Su-Chien. "As we transition our (747) freighter fleet to the 777Fs, this will enable us to deliver world-class services to our customers more efficiently and reliably."