Global airfreight demand rose 9 per cent in 2017, marking its strongest growth since 2010, according to International Air Transport Association (IATA) figures published today (31 January).
The IATA's full-year data for global air freight markets showed that 2017 demand, measured in freight tonne kilometers (FTKs), was more than double the 3.6 per cent annual growth recorded in 2016.
Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 3 per cent in 2017. This was the slowest annual capacity growth seen since 2012. Demand growth outpaced capacity growth by a factor of three.
Air cargo’s strong performance in 2017 was sealed by a solid result in December, the IATA said. Year-on-year demand growth in December increased 5.7 per cent. This was less than half the annual growth rate seen during the middle of 2017 but still well above the five-year average of 4.7 per cent. Freight capacity grew by 3.3 per cent year-on-year in December.
Full-year 2017 demand for air freight grew at twice the pace of the expansion in world trade (4.3 per cent). This outperformance was a result of strong global demand for manufacturing exports as companies moved to restock inventories quickly.
"Air cargo had its strongest performance since the rebound from the global financial crisis in 2010," said Alexandre de Juniac, IATA’s director general and CEO. "Demand grew by 9 per cent. That outpaced the industry-wide growth in both cargo capacity and in passenger demand. We saw improvements in load factors, yields and revenues. Air cargo is still a very tough and competitive business, but the developments in 2017 were the most positive that we have seen in a very long time."
The outlook for air freight in 2018 is optimistic, he continued. "Consumer confidence is buoyant. And we see growing strength in international e-commerce and the transport of time- and temperature-sensitive goods such as pharmaceuticals. Overall the pace of growth is expected to slow from the exceptional 9 per cent of this year. But we still expect a very healthy 4.5 per cent expansion of demand in 2018. Challenges remain, including the need for industry-wide evolution to more efficient processes. That will help improve customer satisfaction and capture market share as the expectations of shippers and consumers grow ever more demanding," said de Juniac.
Airlines in all regions reported an increase in demand in 2017, the IATA said.
Asia-Pacific carriers saw demand in freight volumes grow 5.6 per cent in December 2017 compared to the same period in 2016 and capacity grow by 2.2 per cent. This contributed to a growth in freight demand of 7.8 per cent in 2017 compared to 2016. Capacity increased 1.3 per cent. The strong performance of Asia-Pacific carriers in 2017 largely reflects the ongoing demand for exports from the region’s major exporters China and Japan which has been driven in part by a pick-up in economic activity in Europe and a continued solid performance from the US. This is expected to support demand into the New Year.
North American airlines saw freight demand increase by 5.4 per cent in December 2017 year-on-year and capacity increase of 2.2 per cent. This contributed to an annual growth in 2017 of 7.9 per cent. Capacity grew by 1.6 per cent in the 2017 calendar year. The strength of the US economy and the US dollar have improved the inbound freight market in recent years. Looking towards 2018, the recently agreed US tax reform bill may help to support freight volumes in the period ahead although this may be offset by the recent weakening in the dollar.
European airlines posted a 5 per cent year-on-year increase in freight demand in December and a capacity rise of 3.2 per cent. The strong performance in December boosted cargo volumes for the 2017 calendar year by 11.8 per cent - the largest increase of all regions with the exception of Africa. Capacity in the region increased by 5.9 per cent in the 2017 calendar year. This is consistent with Europe’s manufacturers’ export orders growing at their fastest pace on record. This is expected to support demand into the New Year.