A strong June propelled the global airfreight market to its strongest first half of any year since 2010, the International Air Transport Association (IATA) said today.
Freight demand, measured in freight ton-kilometers (one freight ton flown one mile) grew by 11 percent in June compared to the year-earlier period, pushing first-half 2017 traffic growth to 10.4 percent. That is nearly triple the 3.9-percent average growth rate during the past five years, IATA said.
The first half of 2017 marks the best sustained performance since the industry, along with the world economy, rebounded from the global financial crisis and the severe recession that followed.
Freight capacity, measured in available freight ton-kilometers (AFTKs), grew by 3.6 percent in the first half of 2017 over 2016 levels, IATA said. With demand surges significantly outstripping capacity expansion—a relatively recent phenomenon for the industry—carriers are able to obtain better pricing and improve their yields. However, air freight forwarders, which dominate the air freight user universe, have gotten squeezed as their rate increases to shippers haven't fully compensated them for the higher costs.
The sustained growth of air freight demand is consistent with an improvement in global trade, with new global export orders near a six-year high, IATA said. The airline trade group expects demand to grow by 8 percent in the third quarter, which began July 1.
"Demand is growing at a faster pace than at any time since the global financial crisis. That's great news after many years of stagnation," said Alexandre de Juniac, IATA's director general and CEO. De Juniac added that the industry is capitalizing on the momentum by speeding "much-needed process modernization" to strengthen its value proposition.
Asia-Pacific airlines, which account for the largest share by region, reported a 10.1-percent rise in June freight volumes, according to IATA data. North American carriers posted a 12.7-percent gain, with particular strength coming from import volumes due to the strength of the U.S. dollar, which makes U.S. imports more price-competitive but puts pressure on the export market. European airlines posted a 14.3-percent year-on-year increase as weakness in the value of the Euro spurred strong air export demand.