Air freight worldwide dipped 1.1% in November 2019, according to IATA figures. The rate of decline has slowed but has not been stopped and transport prices remain under pressure.
Global air traffic has now fallen for 13 consecutive months, following a fresh 1.1% decline in tonne-kilometres transported in November 2019 by comparison with the same month in 2018.
If we take the view that the glass is half full, we note that the rate of fall is the lowest since the month of March. This result in part "reflects the growing importance of large e-commerce events such as Singles Day in Asia and Black Friday", IATA said. Indeed, despite the fall in volumes, prices seem to have held up relatively well, particularly between Asia and Europe. Upply's data base shows that air freight transport prices were on an upward trend in November, whether from point to point on the major routes or, more generally, on the Asia-Europe corridor. Over the full year, however, results were much more disappointing, as was generally the current 2019 peak season, which failed to halt the downward trend.
Margins set to contract again in 2020
"Looking ahead, signs of an easing in trade tensions between the United States and China is good news”, said IATA director general and CEO Alexandre de Juniac. But there remains a lot of ground to make up if the air freight industry is to reach the 2% growth forecast for 2020. The forecast published by the association in December predicts a traffic total of 62.4 million tonnes (Mt) in 2020, compared to 61.2 Mt in 2019. This total would be higher than this year's, therefore, but still below the 63.3 Mt total in 2018.
Above all, according to IATA, prices will remain under pressure since, despite the forecast growth in traffic, the organisation expects worldwide turnover to reach $101.2 billion, 1.1% less than in 2019. Margins should therefore contract by 3% in 2020 after having already fallen by 5% in 2019.
Good performances by European companies
From a geographical point of view, the November figures shows that European airlines put in a good performance, showing growth of 2.6%. Only Africa did better (+19.8%) but it is a much smaller market on the world stage.
Asia-Pacific, which is the biggest area in terms of market shares, continued to suffer, however, with traffic down a further 3.7% in November. After years of untroubled growth, the Middle East also experienced further decline (-3%), as did Latin America (-3.4%), although it is used to marked variations in its results.
Finally, North America showed a 1.1% reduction, which IATA says was mainly due to the trade war with China and the relatively modest American economic growth.