Air Cargo demand is reported to be down slightly, but this is compared to historic levels in the recent past. A sign of future trends, or an expected correction?
Data released for May 2023 by the International Air Transport Association (IATA) has revealed weak market conditions for the global air cargo industry.
The association has reported that global demand, measured in cargo tonne-kilometers (CTKs), fell 5.2 per cent compared to May 2022 (-6.0 per cent for international operations).
Capacity, as measured by available cargo tonne-kilometres (ACTKs), rose 14.5 per cent compared to May 2022, which IATA states was primarily driven by belly capacity which increases as demand in the passenger business recovers. Capacity is now 5.9 per cent above May 2019 (pre-pandemic) levels.
Willie Walsh, director general of IATA, said: “Trading conditions for air cargo continue to be challenging with a 5.2 per cent fall in demand and several economic indicators pointing towards weakness.
“The second half of the year, however, should bring some improvements. As inflation moderates in many markets, it is widely expected that central bank rate hikes will taper. This should help stimulate economic activity with a positive impact on demand for air cargo.”
IATA reports there are several key factors influencing demand, including the global manufacturing Purchasing Managers Index (PMI) indicating an annual contraction of 1.4 per cent in new export orders and a decrease of 5.2 per cent year-on-year in production PMI, suggesting a cooling in global manufacturing demand.
When looking at regional performance, some standout statistics include Asia-Pacific airlines witnessing a air cargo volume decrease of 3.3 per cent in May 2023 compared to the same month in 2022, and North American carriers witnessing the weakest performance of all regions for the third consecutive month with an 8.1 per cent decrease in cargo volumes in May 2023 compared to May 2022.
Elsewhere, Latin American carriers had the only positive performance in May 2023 posting a 3.6 per cent increase in cargo volumes compared to May 2022. IATA state this was an improvement in performance compared to April (-1.6 per cent). Capacity in May was up 14.7 per cent compared to the same month in 2022.
The full ‘Air Cargo Market Analysis’ for May 2023 can be found on the IATA website.
Written by: Craig Waters