Cloudy air freight market turns sunny in July

  Global air freight, as measured in freight-ton kilometers, kicked up 5.2 percent in July compared to July 2015, the fastest growth in almost 18 months, according to the International Air Transport Association (IATA).
   The strongest growth occurred in Europe and the Middle East, with July demand up by 7.2 percent and 6.7 percent, respectively, compared to the same month last year. The strong European performance was led by an increase in export orders in Germany, while Middle Eastern airlines are experiencing some of the best performance in terms of demand, but the amount is about half of what it was the previous three years.
   Business for airlines the rest of the year still remains uncertain, with lackluster global trade, weak business confidence, and growing protectionist sentiment in many nations in the face of economic challenges.
   Asia-Pacific airlines reported a 4.9 percent increase in demand for air cargo in July driven by intra-Asia shipping.
   Meanwhile, North American carriers experienced a 4.1 percent increase in freight transport, but only 1.3 percent growth in international freight due to the strong dollar.
   In addition, Latin American airlines saw demand contract by 5.6 percent and capacity increase by 10.1 percent, IATA said. The region continues to suffer from weak economic conditions and political turmoil, especially in Brazil.
   African freight-ton kilometers decreased 6.8 percent – the largest monthly decline in seven years even as African airlines’ capacity ballooned 31.3 percent.
   Weak demand and continued growth of belly capacity in passenger aircraft has put tremendous pressure on airline yields in recent years. Through the first half of the year, overall air freight volume growth was less than 1 percent.