IATA: Hopes for stronger airfreight performance in 2016 are fading

IATA reported (06-Jul-2016) global airfreight yields remained pressured in May-2016 as FTKs increased 0.9% year-on-year and AFTKs increased 4.9%. Freight demand decreased or flat-lined across all regions except Europe and the Middle East. IATA said broad weakness in world trade volumes accounts for about 80% of airfreight's sluggish performance. IATA noted the following regional details:

• Africa: Capacity increased 22.2% in May-2016 on the back of long-haul expansion, continuing the trend seen since Dec-2015;
• Asia Pacific: Airlines continue to face headwinds from weak regional and global trade;
• Europe: Positive demand performance in May-2016 corresponded with an increase in export orders in Germany in recent months;
• Latin America: Economic conditions continued to worsen, particularly in Brazil;
• Middle East: Demand conditions weakened considerably, despite carriers recording the fastest regional growth on aggregate in May-2016. Annual growth in May-2016 was one-fifth of growth in May-2015, reflecting an easing in network expansion by major carriers over the past six months and weak trading conditions;
• North America: Freight volumes suffered from the strength of the US dollar, which kept the US export market under pressure and contributed to freight demand for US carriers remaining in negative territory for the last 12 months.

IATA director general and CEO Tony Tyler said: "Global trade has basically moved sideways since the end of 2014 taking air cargo with it. Hopes for a stronger 2016 are fading as economic and political uncertainty increases. Air cargo is vital to the global economy. But the business environment is extremely difficult and there are few signs of any immediate relief." [more - original PR]