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Slowdown will hit profit outlook

The first half of 2019 has been challenging for the global air cargo business. IATA reported that global air freight markets showed FTKs, decreasing by 3.4% in May 2019, compared to the same period in 2018. This was a slight improvement on the 5.6% contraction in April

The downward trend in cargo transport continued in June. Brussels Airport, for instance, a major European cargo hub, saw a significant decline of 17% compared to the same month last year. In June 2018, the airport says it shipped more than 64,000 tonnes of cargo; this year it handled around 10,000 tonnes less. The slowdown in demand can be felt in all segments and by all airlines. The trucked cargo underwent the strongest downturn: 26.6% lower than June last year. The reduction in cargo transport is also noticeable in other European airports and is due to continuing economic uncertainty.


We have also seen some major European cargo carriers adjust their summer 2019 scheduling by reducing frequencies to reflect this weaker demand. 


The trade disputes between the US and China hasn't made things any easier, the issue of trade wars is certainly something we need to worry about. In this edition of the magazine, we analyse the problem and we find that it is damaging the cargo business, particularly on the Transpacific trade routes. 


The message is echoed across the industry. The US and China are recording pronounced losses and sharply declining trade volumes and the tariffs are definitely having an impact. ANA Cargo tells us that there is a rapid decline of cargo volume between Japan and China as a result of trade frictions between China and North America.


Overall, global economic growth is set to continue, at least for the second half of the year but translating that growth into growth in trade will be the key challenge; and Brexit-related trade uncertainty in Europe and trade tensions between the US and China will continue to contribute negatively. 



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