Middle Eastern airlines’ freight capacity increased by 2.6% in November

Doha: The airlines in the Middle East region, including the three-major Gulf carriers, saw a freight capacity increase of 2.6 percent in November 2019 despite witnessing a year-on-year fall in the air cargo demand.

The Middle Eastern airlines’ freight volumes demand decreased by 3 percent in November 2019 compared to the year-ago period – a significant improvement over the 5.7 percent decrease in October, latest data released by International Air Transport Association (IATA) show.

The IATA, which represents some 290 airlines comprising 82 percent of global air traffic, noted that this year-on-year- fall in freight demand was against the backdrop of operational and geopolitical challenges facing some of the region’s key airlines. But the seasonally adjusted freight volumes in the region have continued a modest upwards trend which is a positive development for the region’s carriers. However, escalated geopolitical tensions threaten the regions’ carriers in the period ahead.

The IATA yesterday released data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), decreased by 1.1 percent in November 2019, compared to the same period in 2018. This marks the thirteenth consecutive month of year-on-year declines in freight volumes.

Despite the decline in demand, November’s performance was the best in eight months, with the slowest year-on-year rate of contraction recorded since March 2019. In part, November’s outcome reflects the growing importance of large e-commerce events such as Singles Day and Black Friday.

While international e-commerce continues to grow, overall air cargo demand continued to face headwinds from the effects of the trade war between the US and China, the deterioration in world trade, and a broad-based slowing in global economic growth.

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 2.9 percent year-on-year in November 2019. Capacity growth has now outstripped demand growth for the 19th consecutive month.

“Air cargo recovered slightly in November, with demand down 1.1 percent – a significant improvement over the 3.5 percent decrease in October. However, the fourth quarter is a peak season for air cargo. So, a decline in growth is still a disappointment. Looking forward, signs of a thawing in US-China trade tensions are good news but there is still a long way to go if cargo is to achieve 2.0 percent growth forecast in 2020,” said Alexandre de Juniac, IATA’s Director General and CEO.

Airlines in Asia-Pacific, Latin America and the Middle East suffered sharp declines in year-on-year growth in total air freight volumes in November 2019, while North American carriers experienced a more moderate decline. Europe and Africa were the only regions to record growth in air freight demand compared to November last year.

Asia-Pacific airlines saw demand for air freight contract by 3.7 percent in November 2019, compared to the same period in 2018. This was the sharpest drop in freight demand of any region for the month.  Capacity increased by 1.8 percent. The US-China trade war has significantly affected the region, with demand on the large Asia – North America market down 6.5 percent year-on-year in October (latest available data). However, the thawing of US-China trade relations and robust economic growth in key regional economies are positive developments.

European airlines posted a 2.6 percent increase in freight demand in November 2019 compared to the same period a year earlier.  Better than expected economic activity in Q3 in some of the region’s large economies helped support demand. Capacity increased by 4.0 percent year-on-year.

Source from: The Peninsula