The outlook for air freight demand is on the up after several years in the doldrums, the International Air Transport Association (IATA) said on Wednesday.
The IATA's Airline Industry Forecast 2014-2018 shows that international freight volumes are expected to increase at a compound annual growth rate (CAGR) of 4.1 per cent over the next five years. Emerging economies, particularly in the Middle East and Africa, will be the fastest-growing markets.
“Air cargo remains as vital to the global economic system as ever. This year, more than US$6.8tn worth of goods, equivalent to 35 per cent of total world trade by value, will be transported around the world by air. So it is welcome to see a forecast for a return to growth for the air cargo sector after several years in the doldrums. An average of more than 4 per cent growth for the next five years would be a marked improvement on the performance of recent years. Since 2011, for example, growth in freight tonnes has averaged just 0.63 per cent per year,” said Tony Tyler, IATA’s Director General and CEO.
“Nevertheless, despite the positive picture, the overall risks to the economic outlook, and therefore to air freight, remain towards the downside. Trade protectionism is a constant danger. According to the World Trade Organization (WTO), between November 2013 and May 2014 alone, 112 new trade-restrictive measures were enacted by G20 governments. Geopolitical concerns, volatility of oil prices, and competition from rail and sea could also affect this forecast. The air cargo industry certainly cannot afford to be complacent,” said Tyler.
To enhance air cargo competitiveness, the industry is aiming to cut average transit times by up to 48 hours by 2020. To achieve this, air freight is modernising its processes, improving quality and reliability, and widening the range of services offered, the IATA said.