The uncertain economic outlook is having a negative impact on demand for air transport

The International Air Transport Association (IATA) announced global traffic results for July showing slower growth in freight, but with considerable variation by region and market.

July freight demand was 3.2 percent lower than it was in the same month last year. This is down on the 0.1 percent year-on-year growth rate of June. A large part of that decline was due to a comparison with a relatively strong July last year, but overall the trend in air freight is weak, in line with subdued world trade growth.

Airlines have responded to this slower growth environment by reducing the capacity added to markets, a move which has stabilized load factors at relatively high levels and provided some support for profitability in the face of high fuel prices.

“The uncertain economic outlook is having a negative impact on demand for air transport,” said Tony Tyler, IATA’s Director General and CEO. “The Air Cargo business is 3.2 percent smaller than it was a year ago.”

GLOBAL air freight demand in July fell 3.2 per cent year-on-year after a 0.1 per cent uptick in June, leaving volumes flat worldwide, according to the International Air Transport Association (IATA).

"The uncertain economic outlook is having a negative impact on demand for air transport," said IATA chief, Mr. Tony Tyler, recently.

"Passenger markets—with the exception of Africa, China-domestic and the Middle East—saw demand fall from June to July. A growth trend is clearly slowing. This, along with rising fuel prices is likely to make it a tough second half of the year," Mr. Tyler said.

The only gainers were the Middle East carriers that posted a 16 per cent increase in demand on a 11 per cent boost in capacity year-on-year, helping raise load factors two percentage points to 45.3 per cent But all other markets experienced declines and the small recovery seen since the end of 2011 has stagnated, said IATA.

Asia-Pacific carriers saw a 7.6 per cent decline in demand in July compared to the previous year, the steepest decline for any region, while capacity dipped just 4.3 per cent. Asia-Pacific carriers have experienced no growth in freight since the fourth quarter of 2011.

European airlines had a 3.6 per cent decline with a 0.9 per cent rise in capacity. Europe's airlines have seen only a one per cent rise in demand since the fourth quarter of 2011.

North American airlines had a 3.6 per cent drop in demand, matching a similar reduction in capacity. Load factor was the lowest for any region at 32.3 per cent.

Latin American airlines' demand fell 5.6 per cent, while capacity climbed 13.9 per cent, resulting in a load factor of 35.2 per cent. African carriers' results were not available but will return next month.

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