Middle East air cargo demand at lowest in seven years

Air cargo demand in the Middle East slowed to its lowest rate in seven years in August amid increasing capacity.

Demand grew 1.8 per cent year-on-year even as capacity increased by 6.9 per cent year-on-year, according to the International Air Transport Association.

“The weakening performance is partly attributable to slower growth between the Middle East and Asia,” Iata said in a statement on Wednesday. “This suggests that Middle Eastern carriers are facing stiff competition from European airlines on the Europe-Asia route.”

For the third time in four months, airlines based in Europe collectively posted the highest annual growth in cargo demand, driven by new export orders in Germany.

The manufacturing PMI in Germany showed a dip of 0.2 per cent in August over July but remained above the long-term average of 51.9, according to research company IHS Markit.

In the UAE, new export orders declined for the second consecutive month in August, according to an Emirates NBD Purchasing Managers’ Index released on Wednesday.

The PMI touched 54.7 in August, down from 55.3 in July “due to slower growth in output, new orders and employment”, the report said.

In June, Emirates SkyCargo launched a freighter route from Hong Kong to Delhi. Emirates SkyCargo, which is the largest airline cargo operator, has a fleet of 245 wide-bodied aircraft, including 15 freighters. It is expecting 36 more aircraft in the current financial year.

Globally, cargo demand, measured in freight tonne kilometres, rose 3.9 per cent year-on-year in August.

“Load factors remained historically low, keeping yields under pressure,” Iata said.

The long-term outlook for cargo growth worldwide is also not encouraging.

“World trade volumes fell by 1.1 per cent in July with no improvement on the horizon,” according to Alexandre de Juniac, Iata’s director general and chief executive. “And the current global political rhetoric in much of the world is more focused on protectionism than trade promotion. Governments should be focused on promoting trade, not raising protectionist barriers.”

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