Trade Tensions Affect Air Cargo Demand: IATA

The uncertainty existing in Brexit-related trade in Europe and trade tensions between the US and China are two reasons cited for air freight demand drop.

By June 4th, 2019 AT 2:07 PM
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Barriers to trade between countries have hit the air cargo demand, according to the International Air Transport Association (IATA). Air freight demand, measured in freight tonne kilometres (FTKs) dropped by 4.7% in April compared to the same period last year. The fall in air freight demand started in January 2019.

The uncertainty existing in Brexit-related trade in Europe and trade tensions between the United States of America (USA) and China are two reasons cited for air freight demand drop. Such tensions resulted in declining new export orders.

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The export demand data is a clear indication of this negative trend. In month-on-month terms, export orders have increased only three times in the past 15 months, and the global measure has been indicating negative export demand since September.

The increasingly negative trend in air freight demand will provide a challenging year for the aviation industry, according to IATA Director General and CEO Alexandre de Juniac.

Also Read: SpiceJet to Add 100th Aircraft to Its Fleet

April saw a sharp decline in air cargo growth and the trend is negative this year. Cost inputs are rising, trade tensions are affecting confidence, and global trade is weakening. Airlines are adjusting their capacity growth to try and fall into line with the dip in global trade since the end of 2018. It all adds up to a challenging year ahead for the cargo business. Governments should respond by easing trade barriers to drive economic activity, he said.

Capacity, measured in available freight tonne kilometres, grew by 2.6% compared to April 2018. The capacity growth outdid demand for the 12th consecutive month.

According to IATA, the timings of Chinese New Year and Easter have played a part in making the air cargo volumes unstable this year. The volumes sit close to 3% below the peak of August 2018, which shows the trend is downward.

 

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Ria is a lead news writer at Aviation Scoop. She writes from dawn to dusk, reads in the evenings, and draws at some ungodly hours. She loathes human interaction, and finds solace in the sweet, musky smell of old books, and rain. Find her on Twitter here - @rialakshman.

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