Demand for global air freight stalled in November to its slowest levels since March 2016 amid signs of weakness in the global economy, though Middle East carriers bucked the trend, according to a new report.
Air cargo volumes are expected to grow 3.7 per cent in 2019 but the outlook for global freight is at risk from governments taking a protectionist stance towards trade, the International Air Transport Association (IATA) said in its monthly report on Wednesday.
"Trade tensions are cause for great concern," Alexandre de Juniac, director-general of IATA, said. "We need governments to focus on enabling growth through trade, not barricading their borders through punitive tariffs."
The global economy's growth is expected to slow to 2.9 per cent in 2019 from 3 per cent in 2018 because of trade tensions and moderating international trade, the World Bank warned on Tuesday. The outlook comes as the US and China remain in a trade standoff that has unsettled markets.
_____________
Read more:
[ Middle East airlines expecting more turbulence in 2019 remain optimistic on strong travel demand ]
[ Markets must brace for more volatility in 2019 across the globe ]
_______________
The flat growth in freight demand in November coinciding with an otherwise typically busier fourth quarter is a "big disappointment", Mr de Juniac said.
Weaker consumer confidence, contracting exports and shorter supplier delivery times in Asia and Europe dented demand, even as international e-commerce continued to grow, IATA said.
The Middle East, North America and Latin America were the only three regions that posted growth in freight demand in November year-on-year. Asia-Pacific, Europe and Africa saw demand contract.
Middle East airlines' freight volumes grew 1.7 per cent in November helped by strong trade between Europe and Asia using the region's strategically located hubs between East and West. Still, capacity outstripped demand, growing 7.8 per cent.
"Seasonally-adjusted international air cargo demand has now trended upwards for the past six months helped by stronger trade to andfrom Europe and Asia," IATA said.
North American airlines' cargo volumes grew the fastest in November at 3.1 per cent, buoyed by the strength of the US economy and consumer spending that benefited the carriers freight business over the past year.
African airlines fared the worst with cargo volumes shrinking 7.8 per cent in November as demand remained weak in key markets.
