Freight volumes analysis:
Freight volumes continued on an upward curve in May, reaching +5.1% on a year-over-year basis, from +4.5% in April and +2.4% in March. May’s results were just below year-to-date figures, which stood at +5.3%. For context, March and May 2017 figures were particularly high, with almost all regions reaching double-digit growth, leading to relatively slower figures this year. The domestic segment, particularly through North America’s high figures, drove a significant portion of that growth. It posted +8.6% for the period, compared to +3.6% for the international market. On a year-to-date basis, international freight has been growing at a slower speed than domestic freight this year, a change of pace from 2017.
North America and Latin America-Caribbean performed particularly well during the period, both reaching +8.6% on a year-over-year basis. North America’s figures showed solid gains for both Canada and the United States, with 14.3% and 8.5% respectively on a year-over-year basis. The United States freight market was still going strong in May, with a year-to-date figure standing at +6.9%. These numbers were mostly driven by domestic freight, which gained 11.3% in May, compared to 4.6% for the international segment. At the airport level, Miami (MIA) and Memphis (MEM) benefitted from strong growth rates, with 9.0% and 8.7% respectively.
As with passenger traffic, Chile and Mexico contributed a significant portion of growth to the Latin America-Caribbean’s freight market in May. The former posted +36.6% on a year-over year-basis, with its year-to-date growth reaching +21.1%. Mexico posted +10.3%, pushing its year-to-date to +9.5%. Chile’s Santiago airport (SCL), which suffered a slowdown in freight traffic in the first quarter of 2017, has managed to recover the loss since and has been growing at double-digit figures in the last six months. The airport posted an increase of 38.0% in freight volumes in May on a year-over-year basis.
Affected by 2017 numbers, Europe’s freight market suffered a relative slowdown during May, posting +1.3% after growing by 4.6% in April and 0.9% in March. Although year-to-date figures remain in moderate growth territory with 4% at the end of May, the region’s 12-months rolling average has been trending downwards in 2018.
As with Europe, Asia-Pacific’s growth, though still robust at +4.8% on a year-to-date basis, has been middling in recent months, its 12-months rolling average reaching +6.3% in May. Year-over-year growth in freight volumes in the region’s major markets was relatively homogeneous, with figures ranging from +6.1% for India, to +3.1% for South Korea. Chinese Taipei (+5.0%), Hong Kong (+4.7%), China (+4.4%) and Japan (+3.6%) all fell between this range. Asia-Pacific’s major air freight markets remain vulnerable to incoming tariffs from the United States through their consumer electronics exports. As such, this more moderate growth may remain for most of 2018.
The Middle East, where the freight market had long sustained growth despite local geopolitical tensions, fell for the second month this year, posting -0.9% for the month of May. Its year-to-date numbers stood at +0.4%, with a rolling 12-month average of +3.1%, which has been steadily declining. The slowdown was mainly due to the United Arab Emirates, the largest freight market in the region, which fell by 5.4% during the month, bringing its year-to-date figures to -4.4%. Qatar’s Hamad International Airport (DOH), despite the blockade, managed to grow by 4.6% on a year-over-year basis. The airport’s year-to-date figures stood at 8.4% at the end of May.
Africa, though remaining the smallest freight market of the six ACI regions, has been growing at a strong rate in the last year. May figures stood at +13.5%, pushing year-to-date figures to +11.4%. This is partly due to recovering figures in Nigeria and Egypt, which represent a major part of the region’s freight market and grew substantially during the month. Nigeria’s year-to-date figures stood at +10.2% in May. Egypt, which has been oscillating between declines and low growth rates in recent months, achieved +19.1% growth for the month on a year-over-year basis, pushing up its year-to-date to +1.0%.
“The air transport sector has shown remarkable resilience to the tense climate that looms over international relations and trade,” said Angela Gittens, Director General, ACI World. “Economic and political pendulums continue to move in opposite directions. On the one hand, historically low unemployment rates in the US and the European union have helped power consumer confidence and the propensity to travel by air in such markets. Moreover, the presence of the low-cost business model among carriers coupled with historically low jet fuel prices, have certainly acted as catalysts to stimulate air transport demand through lower fare offerings on certain market segments. Finally, the flourishing middle class in populous countries such as India and China have certainly helped to boost traffic especially in their respective domestic markets.”
Gittens added, “At the same time, we must be cognizant of the downside risks. For instance, the full impact of the erected tariff walls set by major economies such as the US and China is yet to play out before our eyes. Trade wars could potentially have a recessionary consequence on the global economy thereby jeopardizing advances in air transport demand.”
