The global demand for air freight market has dropped 3.4% in May 2019 compared to the same period last year, according to the International Air Transport Association (IATA). It is slightly better than in April 2019 that showed a drop of 5.6%.
IATA cited weak global trade demand and trade tensions between China and the United States of America (USA) as the reason for the drop of the market. The count of new export orders has been showing a reduction since September 2018.
The impact of the US-China trade war on air freight volumes in May was clear. Year-on-year demand fell by 3.4%. It’s evidence of the economic damage that is done when barriers to trade are erected. Renewed efforts to ease the trade tensions coming on the sidelines of the G20 meeting are welcome. But even if those efforts are successful in the short-term, restoring business confidence and growing trade will take time. And we can expect the tough business environment for air cargo to continue, said Alexandre de Juniac, IATA’s Director General and CEO.
According to the data, the airlines in the Asia Pacific and the Middle East have reported a sharp decline in year-on-year growth of air freight volumes (measured in freight tonne kilometres (FTKs)) in May 2019. While the Asia Pacific reported a negative growth of 6.4%, the Middle East registered another decline of 6.9%. North America and Europe had moderate falls, recording a -1.6% and -0.2% in May 2019. Africa and Latin American airlines reported a growth of 8% and 2.7% respectively.
The US-China trade war and weaker manufacturing conditions for exporters in the region have significantly impacted the Asia Pacific market that accounts for 35% of total FTKs. The demand witnessed in North American airlines can be partly attributed to the falling global trade volumes and US-China trade tensions.
IATA represents some 290 airlines comprising 82% of global air traffic.