Executive Briefings

Growth Drivers in Place for Strong Finish This Year, Air Cargo Group Says

Despite some typically cautious warnings that the current growth cycle may be nearing a peak, industry-wide freight tonne kilometer (FTK) growth is at its strongest pace since 2010 - and global business and consumer confidence levels point to solid improvement at least through the third quarter, IATA said in its Q3 2017 "Cargo Chartbook."

According to the organization, freight traffic in all major international markets is growing at around 10 to 15 percent, year-over-year, and "airline heads of cargo remain positive about the outlook over the year ahead."

World trade finally began to improve during the first half, with volumes growing 4.1 percent, y-o-y, with support from emerging markets for the strongest first half since 2011. Meanwhile, overall confidence in the economy has also tracked upward, with consumer confidence driving strong consumer spending and increased demand for airfreight. Globally, higher demand led to FTK growth of 11.8 percent for the second quarter, which accelerated, compared with the first quarter.

North America was the primary contributor to growth during Q2 of 2017, as airlines across the continent saw their share of global FTKs rise sharply, y-o-y. Asia-Pacific and European airlines also made sizeable contributions to growth in 2017, but those regions’ contributions to global growth were largely stable between the first and second quarters. In terms of cargo throughput, Asia-Pacific airports saw the strongest growth numbers early in the third quarter, particularly the Shanghai, Singapore and Hong Kong airports. Los Angeles International Airport also reported strong growth, while the Middle East — particularly Abu Dhabi, which declined 5.9 percent y-o-y in June — lost out in terms of growth as other regions compete for market share.

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According to the organization, freight traffic in all major international markets is growing at around 10 to 15 percent, year-over-year, and "airline heads of cargo remain positive about the outlook over the year ahead."

World trade finally began to improve during the first half, with volumes growing 4.1 percent, y-o-y, with support from emerging markets for the strongest first half since 2011. Meanwhile, overall confidence in the economy has also tracked upward, with consumer confidence driving strong consumer spending and increased demand for airfreight. Globally, higher demand led to FTK growth of 11.8 percent for the second quarter, which accelerated, compared with the first quarter.

North America was the primary contributor to growth during Q2 of 2017, as airlines across the continent saw their share of global FTKs rise sharply, y-o-y. Asia-Pacific and European airlines also made sizeable contributions to growth in 2017, but those regions’ contributions to global growth were largely stable between the first and second quarters. In terms of cargo throughput, Asia-Pacific airports saw the strongest growth numbers early in the third quarter, particularly the Shanghai, Singapore and Hong Kong airports. Los Angeles International Airport also reported strong growth, while the Middle East — particularly Abu Dhabi, which declined 5.9 percent y-o-y in June — lost out in terms of growth as other regions compete for market share.

Read Full Article