However, the pace of growth was significantly slower than in much of 2017. IATA, which represents some 280 airlines comprising 83 percent of global air traffic, said global air freight, measured in freight ton kilometers, rose 4.1% in April compared to the same period the year before and was up from the 1.8% growth in annual demand recorded the previous month.
Freight capacity grew 5.1% year-on-year in April, marking the second time in 21 months that capacity growth outstripped demand growth, according to IATA. The weaker growth in air cargo is primarily due to the end of the restocking cycle, the report noted, during which businesses rapidly increase their inventory to meet unexpectedly high demand.
The Purchasing Managers’ Index for manufacturing and export orders fell in April to its lowest level since 2016. And according to IATA, a softening of global trade is also evident with containerized freight demand slowing in tandem with air freight demand.
“April saw a strengthening from the abrupt slowdown in growth experienced in March,” Alexandre de Juniac, IATA’s director general and CEO, said. “This is good news. We remain cautiously optimistic that demand will grow in the region of 4 percent this year. But the forecast appears to have increasing downside potential. Oil prices continue to rise as does protectionist rhetoric. Borders open to people and to trade drive economic growth and social prosperity. We are all disadvantaged when they are closed.”
On Tuesday, President Trump again threatened to impose $50 billion in tariffs on Chinese imports—a move with the potential to trigger a trade war—after signaling he had backed off previous statements of the sort. The price of a barrel of light sweet crude oil fell $1.15 to $66.73 on Tuesday on the New York Mercantile Exchange, but was still well above the $45 a barrel price a year earlier.
All regions reported growth on 2017 levels, with varying degrees of expansion. Asia-Pacific airlines saw freight demand recover in April, increasing 3.9% compared to the same period last year, while capacity increased 6.7%.
“As the largest freight-flying region, carrying close to 37 percent of global air freight, the risks from protectionist measures impacting the region are disproportionately high,” IATA said.
North American airlines’ freight volumes grew 3.2% in April from the year-ago period, a slight deceleration in demand from the previous month, as capacity increased 3.4%.
“The weakening of the U.S. dollar over the past year has helped boost demand for air exports,” according to IATA. “Data from the U.S. Census Bureau shows an 11.7% year-on-year increase in air export volumes from the U.S. in the first quarter of 2018 compared to a slower rise in imports of 7.5%. More recently however, the U.S. dollar has been rising.”
European airlines posted a 2.4% increase in freight volumes in April, more than double the rate of growth in March. Capacity increased 4 percent. IATA noted that the strength of the euro and a softening of export orders in Germany “pose downside risks to European carriers.”
Middle Eastern air-freight carriers posted a 7.3% year-on-year growth in volume in April 2018, representing a significant acceleration in demand over the 0.8% recorded the previous month. Capacity increased 4.8%.
Latin American airlines experienced a 10.6% spike in demand las month, the largest increase of any region for the second consecutive month, while capacity fell 4.6%.
“The pick-up in demand over the last 18 months comes alongside signs of economic recovery in the region’s largest economy, Brazil,” IATA noted.
African carriers saw freight demand grow 5.6% in April for a year earlier, after a 3.4% decline in March. Capacity increased 23 percent.