The US-China trade war along with the slowdown in the Chinese economy have significantly impacted this region. The temporary shutdown of Hong Kong International Airport, the largest cargo hub in the world, added additional pressure.
The International Air Transport Association (IATA) on Wednesday released data for global air freight markets showing that demand measured in freight tonne kilometres (FTKs) contracted by 3.9 per cent in August compared to the same period in 2018.
This marks the tenth consecutive month of year-on-year decline in freight volumes, the longest period since the global financial crisis in 2008.
Freight capacity measured in available freight tonne kilometres (AFTKs) rose by 2 per cent year-on-year in August. Capacity growth has now outstripped demand growth for the 16th consecutive month.
Air cargo continues to face strong headwinds from the intensifying trade war between the United States and China, as well as weakness in some of the key economic indicators and rising political uncertainties worldwide. Global trade volumes are 1 per cent lower than a year ago.
Trade in emerging countries has been underperforming that of advanced nations throughout most of 2019.
This is due to higher sensitivity of the emerging economies to trade tensions, rising political instability and sharp currency depreciation in some of the key emerging markets.
Global export orders continue to fall. The global Purchasing Managers Index (PMI) remains in contraction territory. Its tracking of new manufacturing export orders has pointed to falling orders since September 2018. And for the second month in a row, all major trading nations reported falling orders.
“The impact of the US-China trade war on air freight volumes was the clearest yet in August. Year-on-year demand fell by 3.9 per cent,”said IATA’s Director General and CEO Alexandre de Juniac.
“Not since the global financial crisis in 2008 has demand fallen for 10 consecutive months. This is deeply concerning. And with no signs of a detente on trade, we can expect the tough business environment for air cargo to continue. Trade generates prosperity. Trade wars do not. That is something governments should not forget,” he said in a statement.
Airlines in Asia Pacific and the Middle East suffered sharp declines in year-on-year growth in total air freight volumes in August while North America and Europe experienced more moderate declines.
Africa and Latin America both recorded growth in air freight demand compared to August last year.
Asia Pacific airlines saw demand for air freight contract by 5 per cent in August compared to the same period in 2018.
The US-China trade war along with the slowdown in the Chinese economy have significantly impacted this region. The temporary shutdown of Hong Kong International Airport — the largest cargo hub in the world — added additional pressure.
With the region accounting for more than 35 per cent of total FTKs, this performance is the major contributor to the weak industry-wide outcome. Air freight capacity increased by 2.3 per cent over the past year.