Worldwide air freight traffic fell 3.3% in 2019. The fall was the first since 2012 and represented the industry's worst performance since the crisis in 2009. World trade tensions are hitting the industry hard and the coronavirus epidemic has compromised the prospects of recovery.
The warning lights are on in the air freight sector. The December traffic figures confirmed the trend. The industry is struggling. According to IATA's figures, freight volumes in ton-kilometers fell 2.7% during the month, whereas capacity increased 2.8%. As a result, the freight load factor fell 2.7% to 46.7%.
Morose market conditions reflected in prices
These poor December result comes at the end of a morose year. Held back by a slowdown in world trade growth, which finished the year at just +0.9%, world air freight traffic fell 3.3% in 2019 compared to the previous year. At the same time, the freight load factor fell 2.6 points to 46.7%. For Alexandre de Juniac, IATA director general and chief executive, trade tensions, notably between China and the United States, were the main causes of this reduction, the biggest since 2009, when air freight markets plunged 9.7%.
These morose market conditions are reflected in transport prices. According to the Upply data base, average prices between Asia and Europe dropped 6.65% in the fourth quarter of 2019 as compared to the same period in 2018 (find out more about our Trends application).
Recovery compromised by the coronavirus epidemic
Although the trade war seems to have calmed a little, the coronavirus epidemic is now weighing on the prospects of recovery. Restrictions on people's movements and their effect on production capacity will slow down economic growth. "And, for sure, 2020 will be another challenging year for the air cargo business," de Juniac said.
Geographically, 2019 turned out to be particularly difficult for the Asia/Pacific zone. This region easily retains its number one position in the world rankings with a market share of 34.6% but the Asian companies' traffic declined 5.7%, with intra-Asian traffic, notably, down 8%. This was the biggest single fall in traffic, ahead of those in the Middle East (-4.8%), Europe (-1.8%), North America (-1.5%) and Latin America (-0.4%). African companies were the only ones to show an increase in traffic in 2019 (+7.4%) but this was achieved on the basis of a still modest 1.8% market share.
