The International Air Transport Association (IATA) released full-year 2019 data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), fell by 3.3 percent compared to 2018 while capacity (AFTK) rose by 2.1 percent.
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 percent ).
In the month of December, cargo volumes contracted 2.7 percent year-on-year while capacity rose 2.8 percent.
Air cargo’s performance in 2019 was dampened by weak growth in global trade of just 0.9 percent. The sector’s under-performance was also due in particular to slowing GDP growth in manufacturing-intensive economies. Softer business and consumer confidence, along with falling export orders, also contributed to air freight struggles.
There are 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 corona virus outbreak.
“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 corona virus 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,” said Alexandre de Juniac, IATA’s Director General and CEO.
All markets except Africa suffered volume declines in 2019. Asia-Pacific retained the largest share of FTKs, at 34.6 percent. The share of freight traffic increased modestly for both North America and Europe, to 24.2 percent and 23.7 percent, respectively. Middle East carriers’ traffic share held steady at 13 percent. Africa and Latin America saw their shares lift marginally, to 1.8 percent and 2.8 percent.
• Asia-Pacific carriers in December posted a decrease in demand of 3.5 percent compared to the same period a year earlier. Capacity increased by 2.8 percent. The full-year 2019 saw volumes decline 5.7 percent , the largest decrease of any region, while capacity increased by 1.1 percent. 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 percent compared to a year ago).
• North American airlines saw volumes fall by 3.4 percent in December, while capacity grew by 2.1 percent . For 2019 in total, the region’s cargo volumes declined by 1.5 percent, compared to a capacity increase of 1.6 percent. Trade tensions and cooling US economic activity in the latter part of the year have been factors in the decline. The 5.6 percent fall in international year-on-year volumes in December was the weakest monthly growth outcome for the region since early 2016.
• European airlines experienced a 1.1 percent year-on-year decrease in freight demand in December, with a capacity rise of 4.9 percent. The fall in December was typical of the performance for 2019 as a whole, where volumes fell 1.8 percent, but capacity increased by 3.4 percent. Softer activity, including in the manufacturing-intensive German economy, combined with ongoing Brexit uncertainty, contributed to the 2019 result, which in international freight volume terms was the weakest since 2012.