African air carriers post the largest year-on-year increase in demand
The International Air Transport Association (IATA) released data for global air freight markets showing that African carriers’ posted the largest year-on-year increase in demand of all regions in May 2017 with freight volumes growing by 27.6%.
Global air freight demand increasesd by 13% in May. Freight capacity, measured in available freight tonne kilometers (AFTKs), grew by 5.2% year-on-year in May2017. Capacity increased by 14.7% over the same time period.
Demand has been boosted by very strong growth on the trade lanes to and from Asia which have increased by nearly 57% so far this year. However, seasonally adjusted growth has leveled off in recent months.
Demand is measured in freight tonne kilometers (FTKs), grew 12.7% in May compared to the year-earlier period. This was up from the 8.7% annual growth recorded in April 2017 and is more than three times higher than the five year average growth rate of 3.8%.
The continued growth of air freight demand is consistent with an improvement in world trade. This, in turn,corresponds with new global export orders remaining close to a six-year high in May. There are, however, some signs that the cyclical growth period may have peaked. The global inventory-to-sales ratio, for example, has started rising.
This indicates that the period when companies look to re-stock inventories quickly, which often gives air cargo a boost, has ended. Regardless of these developments, the outlook for air freight is optimistic with demand expected to grow at a robust rate of 8% during the third quarter of 2017.
“May was another good month for air cargo. Demand growth accelerated, bolstered by strong export orders. And that outpaced capacity growth which should be positive for yields. But the industry can’t afford to rest on its laurels.
With indications that the cyclical growth period may have peaked, the onus is on the industry to improve its value proposition by accelerating process modernization and enhancing customer-centricity,” said Alexandre de Juniac, IATA’s Director General and CEO.