International air cargo market grows 10.4% – best result since 2010

The International Air Transport Association (IATA) has released data that shows demand in freight ton kilometers (FTKs) from international freight markets grew by 10.4% in the first six months of 2017 when compared to the same period in 2016. This figure represents the best first half-year performance since air cargo bounced back in 2010 after the global financial crisis, and is approaching triple the last five-year average growth rate of 3.9%.
Freight capacity, measured in available freight ton kilometers (AFTKs), grew by 3.6% for the first six months of 2017 compared to the same period in 2016, with demand growth continuing to significantly outstrip capacity growth, which is positive for yields.
Air cargo’s sturdy performance for the first six months of 2017 was underlined by these results. Year-on-year demand growth in June increased 11% compared to the same period in 2016 and freight capacity grew by 5.2% year-on-year in June.
This continued growth of air freight demand is very much in line with in global trade improvement as new global export orders continue to remain close to a six-year high. However, the cyclical growth period may have peaked as the global inventory-to-sales ratio is no longer falling, which would suggest that the period when companies look to restock inventories quickly, which often gives air cargo a boost, may be drawing to a close. However, the future prospects for air freight look good with demand expected to grow at 8% during the third quarter of 2017.
According to Alexandre de Juniac, IATA’s Director General and CEO. “Air cargo is flying high on the back of a stronger global economy. Demand is growing at a faster pace than at any time since the Global Financial Crisis. That’s great news after many years of stagnation. And, even more importantly, the industry is taking advantage of this momentum to accelerate much-needed process modernization and improve the value it provides to its many customers.”