Air freight is often seen as a barometer of global economic activity and latest data from global airline grouping International Air Transport Association (IATA) for March 2017 is painting a very positive picture. Latest data shows global air freight markets showing demand growth of 14% in freight tonne kilometres (FTKs) compared to the same period last year. This was the fastest pace of growth recorded since October 2010.
The March performance, which also included a 4.2% year-on-year rise in available freight tonne kilometres (AFTKs), contributed to very strong first quarter (Q1) growth in freight volumes. After adjusting for the impact of the leap year in 2016, freight demand in Q1 2017 increased by nearly 11%. Capacity increased by 3.7% over the same period (leap year adjusted).
The strengthening of air freight demand in March is consistent with an uptick in world trade and a six-year high in new export orders. An increase in the shipment of silicon materials typically used in high-value consumer electronics shipped by air, is also likely underpinning a portion of the strong performance.
“March capped a robust first quarter with the strongest year-on-year air freight growth in six-and-a-half years. Optimism is returning to the industry as the business stabilises after many years in the doldrums,” says Alexandre de Juniac, director general and chief executive officer, IATA.
There is, however, still much lost ground to recover while facing the dual headwinds of rising fuel and labour costs. “It remains critical to use the improvement in the industry’s fortunes as an opportunity to enhance the value offering by implementing modern customer-centric initiatives that streamline processes and reduce costs,” adds Mr de Juniac.
All regions, with the exception of Latin America, reported year-on-year increases in demand in March 2017. But it was airlines in Europe and Asia-Pacific that posted the strongest growth accounting for two-thirds of the industry-wide increase in demand. The remaining growth was split between North American and Middle Eastern carriers, with African airlines making a modest contribution.
European airlines posted the largest region rise in AFTKs of 6.7% which translated into an 18.2% increase in freight volumes in March 2017. International freight volumes grew by 18.1% year-on-year, the fastest pace in six years. Seasonally-adjusted freight volumes also continue to trend upwards. The ongoing weakness of the Euro persists in boosting the performance of the European freight market which has benefitted from strong export orders over the last few months.