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World air cargo up 3.9pc in August, Asia-Pacific up 2.8pc, Europe up 6.6pc

THE International Air Transport Association (IATA) reported that August air cargo demand, measured in freight tonne kilometres (FTKs), increased 3.9 per cent year-on-year.

Freight capacity measured in available freight tonne kilometres (AFTKs) increased 4.1 per cent over the same period. Load factors remained low, keeping yields under pressure.

Carriers in all regions except Latin America reported an increase in year-on-year demand in August.

For the third time in four months airlines based in Europe posted the highest collective annual growth of all regions, while airlines in the Middle East experienced their slowest growth in more than seven years.

"August numbers showed improvements in cargo demand. While this is good news, the underlying market conditions make it difficult to have long-term optimism," said IATA director general and CEO Alexandre de Juniac.

"World trade volumes fell 1.1 per cent in July with no improvement on the horizon. And the current global political rhetoric in much of the world is more focused on protectionism than trade promotion," said Mr de Juniac, former CEO of Air France-KLM.

Asia-Pacific airlines reported a 2.8 per cent increase in demand for air cargo in August compared to last year. Capacity in the region expanded 1.2 per cent.

International traffic within the region has been the strongest of the "big-four" markets (Asia Pacific, Europe, North America, and Middle East) so far this year, with traffic up 6.5 per cent year-on-year in July 2016.

North American carriers saw freight volumes expand 5.5 per cent in August 2016 year on year and capacity increase 3.7 per cent.

International freight volumes grew 4.6 per cent in August - their fastest pace since the US seaports disruption boosted demand earlier in 2015.

European airlines posted the largest increase in freight demand of all regions in August 2016 - 6.6 per cent year on year. Capacity increased 4.7 per cent.

The positive European performance corresponds with an increase in reported new export orders in Germany over the last few months. European freight demand has now broken out of the corridor that it occupied between mid-2010 and the start of the year.

Middle Eastern carriers saw air freight demand slump to 1.8 per cent year-on-year growth in August 2016 - the slowest pace since July 2009.

Capacity increased 6.9 per cent. The strong upward trend seen in Middle Eastern traffic over the past year has halted. The weakening performance is partly attributable to slower growth between the Middle East and Asia.

This suggests that Middle Eastern carriers are facing stiff competition from European airlines on the Europe-Asia route.

Latin American airlines saw demand contract in annual terms for the sixth consecutive month. FTKs in August 2016 fell 3.3 per cent compared to the same period last year and capacity decreased 0.2 per cent. The region continues to be blighted by weak economic and political conditions, particularly in the region's largest economy, Brazil.

African carriers saw demand rebound sharply in August to 3.7 per cent - the fastest growth rate in 12 months. Despite this, freight capacity continues to outstrip demand, due to rapid long-haul expansion.