Air Cargo Volume Falls Consecutively for 18 Months, Capacity Growth Still Surpassing Demand

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The International Air Transport Association (IATA) has published data for global air freight markets which highlights demand, measured in freight tonne kilometers (FTKs) for the cargo going by airplanes. As per this new report, the FTK decreased by 4.5% in September 2019 as compared to the data obtained in the same period last year. It is worth noting that this is the eleventh consecutive month that the FTK has dropped. The last time this happened was back in 2008 during the financial crisis.

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Freight Capacity Increasing While Demand Falls

Freight capacity which is another important parameter in the industry and is measured in freight tonne kilometers (AFTKs) witnessed an increase by 2.1% year-on-year in September 2019. This is the 17th consecutive month where the capacity growth has again outgrown demand growth.

The major problems being faced by the air cargo industry include the intensifying trade war between the US and China, and South Korea and Japan, the overall decline in global trade and also the weakness in some of the key parameters in economics. Not only this, but the concerns also come from falling orders from the global export.

Orders From Exporters Also Declining

The Purchasing Managers Index (PMI) which tracks the orders from new manufacturing exports orders has pointed out that the orders have consistently fell down since October 2018.

Alexandre de Juniac, IATA's Director General and CEO remarked about this, “The US-China trade war continues to take its toll on the air cargo industry. October’s pause on tariff hikes between Washington and Beijing is good news. But trillions of dollars of trade is already affected, which helped fuel September’s 4.5% year-on-year fall in demand.  And we can expect the tough business environment for air cargo to continue.”

As for the Asia Pacific region, the air cargo demand fell by 4.9% in September 2019 as compared to the same month in the last year. In the same time, Air freight capacity increased by 2.7% over the past year.

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Whenever Arpit boards a plane he is filled with awe and bewilderment and soaring above the skies is something marvellous for him. An aviation and tech geek through and through Arpit writes at AviationScoop not only because he's experienced and good at his craft but also because flying is something which makes his heart flutter with joy.

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