Air freight up 5.9% in October

The International Air Transport Association (IATA) released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), rose 5.9% in October 2017 compared to the year-earlier period. This was a slowdown from the 9.2% annual growth recorded in September 2017 but still exceeded the average annual growth rate of 3.2% over the past decade. Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 3.7% year-on-year in October. This was the 15th consecutive month in which demand growth outstripped capacity growth, which is positive for load factors, yields, and financial performance. The inventory-to-sales ratio in the US is tracking sideways, indicating that the period when companies look to restock inventories quickly, which often gives air cargo a boost, has ended. The new export orders component of the global Purchasing Managers’ Index (PMI) is stable. And the upward trend in seasonally-adjusted freight volumes has moderated. Freight volumes are still expected to grow in 2018, although at a slower pace than in 2017. “Demand for air freight grew by 5.9% in October. And tightening supply conditions in the fourth quarter should see the air cargo industry deliver its strongest operational and financial performance since the post-global financial crisis rebound in 2010,” said Alexandre de Juniac, IATA’s Director General and CEO.