This was the slowest pace of growth seen since May 2016 and far below the five-year average growth rate of 5.1%.
Freight capacity, meanwhile, measured in available freight tonne kilometres, grew by 3.8% year-on-year in July 2018: the fourth time in five months that capacity growth surpassed demand growth.
IATA identifies several factors as contributing to slower growth. The temporary grounding of the Nippon Cargo Airlines fleet may have exaggerated a slowdown in growth at the beginning of July, while contributors that continue to impact the statistics include the weakening of export orders for manufacturing firms and the end of inventory re-stocking cycle at start of 2018.
"July demand for air cargo grew at its slowest pace since 2016. We still expect 4% growth over the course of the year, however the downside risk has increased,” said Alexandre de Juniac, IATA's Director General and CEO. “The tariff war and increasingly volatile trade talks between the world’s two largest trading nations – China and the US - are rippling across the global economy putting a drag on both business and investor sentiment. Trade wars only produce losers.”
North American and European airlines posted a 2.6% increase in freight volumes in July, a significant decrease from European airlines’ five-year average annual growth rate of 5.6%. Growth slowed to 3.0% in July for Latin American carriers and to just 0.9% compared to the previous year for Asian airlines. African carriers saw freight demand contract by 8.3% in July 2018, the fourth time in five months that demand has declined.
Middle Eastern carriers posted the fastest growth of any region in July 2018 with an increase in demand of 5.4%.
Read July's full market analysis here: https://bit.ly/2MDZLf2