What’s ahead for European air trade?

After two strong years, EU-28 air freight export and import tonnage declined in 2019, pushing the average five-year compound annual growth rate down to 2%. Airfreight imports and exports are only 11% higher today than they were in 2014. Figure 1 provides an overview of combined air freight imports and exports into and from all 28 EU member states, including the U.K. This assessment excludes Switzerland, Norway and Iceland. Switzerland and Norway are important export and import markets that are well integrated into other European cargo networks. Figure 1 – EU Air Trade 2014 – 2019, in thousands of tonnes

Performance by commodity Performance was modest or negative across most key commodity groups, although there were some segments that did well (see Figure 2). Fish exports, primarily from the U.K., were up 25%; vegetable exports were up 3%; and optical and medical equipment exports were up 2%. However, Europe’s main export staple of industrial and other machinery, which account for close to 34% of airfreight exports, was down 3%. The biggest decline was seen in the automotive sector, where exports of parts were down 26% and imports were down 15%. The slump in the movement of car parts was due to a pre-tariff surge in 2018, rather than the ongoing weakness in the car industry. Most perishable food import categories, except vegetables, were up. Fresh flowers, fruit and vegetables account for 7%, 6% and 4% of import weight, respectively. Apparel, which accounts for 10% of imports, was down by 10%, but footwear imports increased by 14%. Figure 2 – Export and Import Performance by Commodity in 2019

Performance by country Import and export air tonnage was down for China, the US, Japan and India, the top four trading partners, accounting for almost half of European air freight volumes. China, the largest trading partner, accounted for 22% of all airfreight imports and exports in 2019, followed by the US at 20%; Japan and India each accounted for 4%. Most of this can be attributed to general economic weakness after several years of growth. Figure 3 – Import and Export performance by trading partner

Other smaller markets paint a more mixed picture. For example, imports from Mexico and Hong Hong were up, but exports to these countries were down. Conversely, while imports from Malaysia, Korea and Vietnam were down, exports to these countries were up. Performance by EU country The interactive map below shows performance by individual European country. The pop-up shows information on export vs. import performance. Note that air trade figures do not necessarily correspond with the point or arrival or departure, as many goods travel in bond until they reach their final destination or are already cleared for export at origin. For example, Luxembourg airport only shows air freight exports and imports of about 24,000 tonnes, but cargo volumes through the airport in 2019 were close to 900,000 tonnes. Map - 2019 Air Trade Growth by Country

.embed-container {position: relative; padding-bottom: 80%; height: 0; max-width: 100%;} .embed-container iframe, .embed-container object, .embed-container iframe{position: absolute; top: 0; left: 0; width: 100%; height: 100%;} small{position: absolute; z-index: 40; bottom: 0; margin-bottom: -15px;} <iframe title="2019 EU Air Trade Analysis" src="//www.arcgis.com/apps/Embed/index.html?webmap=7096542eb837433eb27e46661026569a&extent=-42.333,28.9604,61.2901,65.0908&zoom=true&previewImage=false&scale=true&details=true&legend=true&active_panel=details&basemap_gallery=true&disable_scroll=true&theme=light" width="500" height="400" frameborder="0" marginwidth="0" marginheight="0" scrolling="no" data-mce-fragment="1"> Here are some key takeaways on 2019 developments: Germany, which is Europe's largest air trade market and is heavily dependent on industrial goods and car parts, saw exports drop by 12% and imports drop by 13%. Dutch air imports were up 4%, thanks to growth in flowers and perishable commodities, among others, but exports were slightly down by 1%. However, this growth follows a decline in 2018, a year during which most other airports in Europe posted positive growth. During that year the air transport movement cap forced freighter operators to shift operations to other European airports. U.K. air imports were down 14% while exports grew by 1%. Belgium saw air imports increase by 31%, driven by strong freighter growth, particularly into Liege, which is a hotbed of cross border e-commerce, but also a preferred location for expanding operations by Ethiopian, Qatar Airways and AirBridgeCargo, among others. What’s in store for 2020 In January, we were expecting 2020 to turn be a subdued year of growth, following some stellar years for the business, with growth expected to be around 2%-3%. However, our short-term outlook for 2020 airfreight is evolving by the day as countries around the world introduce new restrictions to deal with the spread of the COVID-19 pandemic. However, it is worth noting that lockdowns have primarily affected the service sector. In most cases, industrial production continues, even in countries like Italy. Chinese production has started ramping up as well. While demand for freighter capacity is extremely high due to passenger flight cancellations, industry participants confirm that the commodity mix is is different from the usual and changing from week to week. We expect airfreight to remain volatile, at least for the coming months, until the situation has stabilized. Many important airfreight commodities, such as machinery, automotive, textiles and consumer goods, are likely to be weak or negative. There is unlikely to be investment in new capacity requiring machinery in 2020 as companies focus on survival rather than growth. Perishable and pharmaceutical demand should hold steady. Once people resume their normal lives and demand starts to recover, there is potential for a surge in airfreight in the second half of the year as companies rely on airfreight to replenish inventory levels and meet evolving demand. Container shipping volumes are expected to recover once demand has stabilized.

What’s ahead for European air trade?

2020: The year of the freighter?

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What’s ahead for European air trade?

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2020: The year of the freighter?

State of airfreight in mid-March

Related Posts

Amazon air network spend exceeds $1B per year as dedicated fleet grows

Exploring international, regional and domestic airfreight vaccine flows (updated)

Japanese air exports up in December and January, imports down

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State of airfreight in mid-March

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ADA Compliance