Aviation industry may be pointing to a looming global downturn

Two indicators in the aviation industry may be pointing to a economic downturn: declining demand for air cargo and a “peak” in aircraft orders last year, said to the executive chairman of CAPA Centre for Aviation. Peter Harbison explained that cargo demand is “typically seen as a forward indicator of ... not just the airline industry, but where the economy generally is heading ... Cargo is now declining fairly steeply, which suggests that the economy ... is not going to look so good.” As the world’s two largest economies remain deadlocked in a dispute over trade and technology, fears of a global recession have emerged. Demand in global air freight markets fell by 4.7% as compared to the same period last year, according to the IATA. Trade uncertainties contributed to declining new export orders and the weakness is likely to persist in the coming months, according to IATA. While there was a surge in demand for cargo about six to nine months ago — which gave “some kind of optimism” — Harbison maintained that the increase may just be a “one-off surge.” The “peak” in aircraft orders in 2018 may also be another indicator of a slowing global economy, Harbison said. “Leaving aside the impact of grounding the Maxes — assuming that will start to be rectified within the next 6 months at least — I think we probably did see a peak in aircraft orders last year, which unfortunately, generally, cyclically seems to precede the year when things turn down a bit,” he said.<br/>