IATA – Weak December weighs on full-year air cargo activity

Global airfreight traffic rose 3.5 percent in 2018, weighed down by an unusually weak December in which volumes fell 0.5 percent from the year-earlier period, according to International Air Transport Association (IATA) data released yesterday.

Volumes for the year fell significantly from the 9.7 percent year-over-year gain reported in 2017, a period of synchronized global recovery and significant inventory restocking unlikely to be repeated. Volumes in 2018 started strong but weakened toward the end of the year as global economies slowed, concerns escalated over Britain’s departure from the European Union, the U.S. government experienced a partial slowdown and trade tensions flared between the U.S. and China.

The December data was the worst monthly performance since March 2016, according to IATA.Carriers serving the Asia-Pacific market, the world’s largest in terms of market share, reported a 4.5 percent decline in December, which is typically a strong month for Asian air exports. The weak December results � which were actually tame compared to figures from other sources � lend empirical credence to anecdotes of an uneventful holiday period for air cargo activity. In prior years, companies like Apple Inc. (NASDAQ:AAPL) would book hundreds of charter flights out of Asia, pressuring capacity and leading to rate spikes. That was not the case this past December, which was a turbulent month across the world, especially in financial markets. U.S. stock prices, for example, had their worst December performance since the Great Depression.

Lower consumer sentiment, especially among Americans, didn’t help matters; consumer expectations in the U.S. came in surprisingly weak, with many consumers surveyed expecting a recession in 2019.

Europe and North America fared better in December. North America, posting a 2.9 percent year-over-year gain, had the best results of the six regions surveyed. Of the regions, only North America and Europe posted year-on-year gains of more than 0.1 percent. Three markets � Asia, Africa and Latin America � posted declines.

Source: Civil Aviation Authority