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IATA: Air cargo growth rebounds in April

Growth in global air freight volumes rebounded in April after slowing considerably the previous month.
Cargo demand jumped 4.1 percent for the month compared with the same 2017 period, up from the 1.7 percent year-over-year growth rate seen in March, according to the latest data from the International Air Transport Association. The March increase was also the the slowest pace in 22 months.
Growth in available air freight capacity also accelerated, from 4.4 percent in March to 5.1 percent in April, meaning that capacity growth outpaced that of volumes for just the second time in 21 months.
Through the first three months of the year, airfreight volumes are up 5.1 percent compared with the same 2017 period, but the pace at which demand is growing, remains significantly slower than in much of 2017, according to IATA.
The association attributed the “weaker” volume growth primarily to the end of the restocking cycle, during which businesses rapidly increased their inventory to meet unexpectedly high demand, as well as a softening of global trade.
“A softening of global trade is also evident with containerized freight demand slowing in tandem with air freight demand,” added IATA. “Seasonally adjusted freight volumes continue to track sideways.”
IATA Director General and CEO Alexandre de Juniac said the April figures were encouraging in that they represented “a strengthening from the abrupt slowdown in growth experienced in March,” adding that the association remains “cautiously optimistic” in its forecast of 4 percent air freight growth for 2018.
De Juniac warned, however, that IATA’s projection “appears to have increasing downside potential,” due to increasing oil prices and protectionist rhetoric in international trade negotiations.
“Borders open to people and to trade drive economic growth and social prosperity,” he said, possibly referencing the United Kingdom’s looming departure from the European Union or the United States’ recent decision to impose tariffs on imports of steel and aluminum, as well as on £50 billion or so annually in Chinese goods. “We are all disadvantaged when they are closed.”
Broken down by geographical region, all six of the areas tracked by IATA recorded increases in demand in April, and four of the six saw increases in year-over-year growth rates.
Air freight volumes carried by Asia Pacific airlines climbed 3.9 percent for the month after inching up just 0.7 percent in March, while capacity grew 6.7 percent. IATA noted that because Asia accounts for roughly 37 percent of all global air cargo shipments, “the risks from protectionist measures impacting the region are disproportionately high.”
European airlines saw freight volumes rise 2.4 percent in April following a 1 percent gain the previous month, as capacity increased 4 percent year-over-year.
“The strength of the Euro and a softening of export orders in Germany pose downside risks to European carriers,” IATA said.
North American carrier shipments increased 3.2 percent year-over-year in April, a slight deceleration from March’s 3.9 percent year-over-year growth rate.

Capacity growth also outstripped that of demand, rising 3.4 percent for the month.
“The weakening of the U.S. dollar over the past year has helped boost demand for air exports,” the association explained. “Data from the US Census Bureau shows an 11.7 percent year-on-year increase in air export volumes from the U.S. in Q1 2018, compared to a slower rise in imports of 7.5 percent.

More recently however, the U.S. dollar has been rising.”
Cargo volumes carried by Middle Eastern airlines climbed 7.3 percent for the month, a “significant acceleration in demand” compared with the 0.8 percent growth seen in March.
Latin American airfreight carriers, meanwhile, saw a 10.6 percent boost in monthly volumes, down from 15.5 percent growth the previous month.
African airlines saw shipments rise 5.6 percent from the same month a year ago after sinking 3.4 percent in March.
Middle Eastern and African carriers grew capacity 4.8 percent and 23 percent, respectively, while Latin American capacity fell 4.6 percent, according to IATA.

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