IATA reports weak September traffic, sees possibility for improvement in 2020  

The International Air Transport Association (IATA) released preliminary data indicating that total industry wide cargo traffic, measured in freight tonne kilometers (FTKs), decreased by 4.5% year-over-year in September. The continued contraction of the market reflects the general disappointment for air cargo toward the start of its traditional peak season.  
However, IATA noted in its September Air Freight Market Analysis that most of the decline in air freight volumes occurred in late 2018 and early 2019 with the downward trend having plateaued since that time. Should this current trend continue, year-on-year growth rate is expected to return to positive territory in the early part of 2020. 
Returning to September 2019, industrywide airfreight capacity measured in available freight tonne kilometers (AFTKs), rose 2.1% y-o-y for the month and 1.9% for the first nine months of 2019. Capacity growth has now “outstripped” growth in demand for the 17th consecutive month, according to IATA.  
Softer demand has dragged load factors as well, which are down 3.2 percentage points y-o-y for September 2019, and 2.6 percentage points for the first nine months of 2019, compared to the same period the year prior.    
IATA cites ongoing weakness in several key economies including Germany and the UK as well as the ongoing political uncertainty stemming from Brexit’s delay, the most recent escalation in the U.S.-China trade dispute and stricter trade controls between South Korea and Japan, as impacting global volumes. The new export orders component of the manufacturing Purchasing Managers’ Index (PMI) was also negative this month, despite a slight improvement from August. 
“Taken together, it is unsurprising that this backdrop has been reflected in weaker trade volumes,” said IATA. “Trade volumes have been declining in year-on-year terms for the past three months across both advanced and emerging economies, with the latter having been particularly impacted.” 
As was the case for August, falling freight volumes were observed across all key regions, except for Africa. Freight demand contracted across the largest routes between Asia and North America, where seasonally adjusted volumes are down 4.5% y-o-y, compared to their levels in September 2018. That being said, the figure was a modest improvement from the nearly 5% y-o-y decline in August. Seasonally adjusted FTKs for the region also continue to trend sideways, halting the downward trend that took place between third quarter 2018 and first quarter 2019, according to IATA. 
Even though the Asia-Pacific and North America regions account for most of the FTK contraction seen in September, IATA recognizes weakness in air cargo more broadly. FTKs are also lower on routes to and from Europe and the Middle East, compared to the same period the year prior, according to the report.   
Airlines in the Middle East, Asia-Pacific, Europe and North America regions were the weakest performers for the month. Total FTKs fell 8.0%, 4.9%, 3.3% and 4.2% y-o-y, respectively. Meanwhile total capacity for the Asia-Pacific, Europe and North America increased by 2.7%, 3.3% and 1.9%, respectively.  
Meanwhile, carriers based in Latin America saw a 0.2% y-o-y decrease in overall September air freight demand and a 2.9% decrease in overall capacity. Year-to-date demand and capacity in the region are up 0.9% and 5.8%, respectively. International FTKs for Latin American airlines, however, declined by 3.1% y-o-y for the month, compared with a 2.0% decline in August. Despite recent indications of recovery in the Brazilian economy, deteriorating conditions elsewhere in the region along with the difficult global market have contributed to the region’s easing air cargo volumes, according to IATA.  
Africa saw the strongest performance for the seventh month in a row, with airfreight demand increasing 2.2% y-o-y, continuing an upwards trend that became evident in mid-2018. Capacity grew 9.4% y-o-y, despite the small size of the region’s market, which makes up only 1.6% of the world’s share of airfreight. Year-to-date, demand and capacity are up by 4.9% y-o-y and 13.6%, respectively.   
Source: aircargoworld