ME carriers’ freight demand up by 9pc

Seasonally-adjusted growth has, however, slowed, due to weak freight volumes between the Middle East and Asia, and the Middle East and North America

01 January 2017

Middle Eastern carriers saw air freight demand increase by 9.2 per cent in October year-on-year, marking an improvement over the last few months’ performance, said to a report released by the International Air Transport Association (Iata).

However seasonally-adjusted growth has slowed, predominantly due to weak freight volumes between the Middle East and Asia, and the Middle East and North America (Mena). Capacity in the region increased by 4.2 per cent.

African carriers’ freight demand increased by 7.4 per cent in October 2016 compared to the same month last year. However, capacity surged by 24.7 per cent on the back of long-haul expansion, in particular by Ethiopian Airlines. International freight demand for African airlines slowed in October, but still remained robust at 7.7 per cent year-on-year.

Globally, air freight markets in October showed that demand, measured in freight tonne kilometres (FTKs), rose 8.2 per cent year-on-year during the month. This was the fastest pace of growth seen in 18 months. Freight capacity, measured in available freight tonne kilometres (AFTKs), increased 3.6 per cent over the same period.

“Global air freight markets look set to end 2016 on a high note. Demand is growing at its fastest pace in 18 months. It remains to be seen how long this growth trend will endure after the year-end peak period and we still face headwinds from weak global trade. But there are some encouraging signs. The peak has been stronger than expected. And purchasing managers are reporting a pick-up in new export orders. So we will enter 2017 propelled by some much-needed positive momentum,” said Alexandre de Juniac, Iata’s director general and CEO.

Some one-off factors are likely impacting October’s positive results: (1) there is potential modal shift to air cargo following the collapse of the Hanjin Shipping Company in August and (2) there could be some last minute reliance on air transport as companies exercised caution in ordering as a result of weak market conditions earlier in the year.

Structural market shifts are also likely underpinning a portion of the stronger performance. This includes strong growth in cross-border e-commerce and pharmaceutical flows. Preparation for the increasing popularity of sales events such as Black Friday and Cyber Monday may also have contributed to the increased demand peak.

“The drivers of stronger growth are sending a major signal for change to the air cargo industry. Whether it is e-commerce or the trade in pharmaceuticals, shippers are demanding more than current paper processes can support. The shift to e-freight is more critical than ever,” said de Juniac.

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