Global air freight demand, measured in freight tonne-kilometres (FTKs), saw its worst dip in 2019 as it fell by 3.3% as compared to 2018 while capacity rose by 2.1%, as revealed by the International Air Transport Association (IATA) in their full-year 2019 report. This was the first year of declining freight volumes since 2012, and the weakest performance since the global financial crisis in 2009 (when air freight markets contracted by 9.7%).
In the month of December, cargo volumes contracted 2.7% year-on-year while capacity rose 2.8%.
Air cargo’s performance in 2019 was suppressed by weak growth in global trade of just 0.9%. The sector’s underperformance can also be attributed to slowing GDP growth in manufacturing-intensive economies. Softer business and consumer confidence, along with falling export orders, also contributed to air freight struggles.
“Trade tensions are at the root of the worst year for air cargo since the end of the Global Financial Crisis in 2009. While these are easing, there is little relief in that good news as we are in unknown territory with respect to the eventual impact of the coronavirus on the global economy. With all the restrictions being put in place, it will certainly be a drag on economic growth. And, for sure, 2020 will be another challenging year for the air cargo business.”~Alexandre de Juniac, IATA’s Director General and CEO.
A noticeable trend observed is the volume decline in all markets except Africa in 2019. Asia-Pacific retained the largest share of FTKs, at 34.6%. The share of freight traffic increased modestly for both North America and Europe, to 24.2% and 23.7%, respectively. Middle East carriers’ traffic share held steady at 13%. Africa and Latin America saw their shares lift marginally, to 1.8% and 2.8%.
Asia-Pacific carriers in December exhibited a decrease in demand of 3.5% compared to the same period a year earlier. Capacity increased by 2.8%. The full-year 2019 saw volumes decline 5.7%, the largest decrease of any region, while capacity increased by 1.1%. As the world’s main manufacturing region, international trade tensions and the global growth slowdown weighed heavily on regional air freight volumes in 2019. Within-Asia, FTKs were particularly affected (down 8% compared to a year ago).
There are, however, signs that confidence and orders could pick up in 2020. It is too early to say what long-term effects will be seen from the impact of restrictions associated with combating the coronavirus outbreak.