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Strongest First Half for Air Freight Sector in Seven Years

Strongest First Half for Air Freight Sector in Seven Years

According to the latest figures released by the International Air Transport Association (IATA), 2017 has represented the strongest first half for the air freight sector in seven years, with the growth in demand 10.4 percent higher than for the same period last year.

This symbolises the strongest interim performance for air cargo since its decline in the wake of 2010’s global financial crisis, with this robust statistic nearly three times the industry’s average yearly rate for the past five years, which has been just 3.9 percent.

The sector’s June performance only compounded this result, with year-on-year growth for the month increasing by 11 percent when measured against the 2016 figures.

Freight capacity, despite its growth being vastly outstripped by the rise in demand, also increased each year, by 5.2 percent for the month of June, and by 3.6 percent for the first half of 2017, having a positive effect on overall yields.

IATA attributed such increases to the wider growth of global trade, which has caused global export orders to climb to nearly their highest point in six years. It has thus commented that the outlook appears optimistic for the third quarter, with demand expected to rise at ‘a robust rate’.

Despite this, the IATA appears keen not to get ahead of itself, warning that there are some signs present to indicate that this is a cyclical growth period - one which may have already peaked.

With the global inventory-to-sales ratio no longer falling, it may be the case that companies are no longer looking to rapidly restock their inventories, heralding a decrease in the boost that such a trend gives to the air cargo sector.

Regardless, the airline trade body has remained upbeat in its forecast, noting that even accounting for such developments, growth predictions remain positive, with demand expected to increase by an impressive 8 percent during the third quarter of the year.

As CEO and director general Alexandre de Juniac explains: “Air cargo is flying high on the back of a stronger global economy. 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. And, even more importantly, the industry is taking advantage of this momentum to accelerate much-needed process modernisation and improve the value it provides to its many customers.”

Such growth was witnessed across diverse geographical regions, with carriers in Asia Pacific and Europe accounting for two-thirds of the increase in demand. As an IATA spokesman explained: “Seasonally-adjusted international freight volumes are now 4 percent above the level reached in 2010 following the global financial crisis bounce-back. Demand growth has been strongest – between 13 and 15 percent – on international routes within Asia as well as between Asia and Europe.”

There was also plenty of positive growth amongst North American carriers, who saw the demand for freight services rise by a phenomenal 12.7 percent year-on-year in June, and their capacity grow by 3 percent over the same period. This represented a 9.3 percent growth in demand for the first half of 2017, compared to negative growth for the same period in 2017.

Based on such figures, the future is looking inarguably bright for the air freight sector moving forwards.