Air cargo contraction eases in June: IATA

Cargo capacity, measured in available cargo tonne-kilometers, rose 9.7% compared to June 2022, which was a slower rate compared to double-digit growth recorded between March and May, says Willie Walsh, Director General, IATA. Demand in June was only 2.4 per cent below June 2019, he adds.

CT Bureau

IATA released data for June 2023 global air cargo markets showing the smallest year-over-year contraction in demand since February 2022.

Global demand, measured in cargo tonne-kilometers (CTKs), fell 3.4 per cent in June compared to June 2022 (-3.7% for international operations). For the half year, demand slid 8.1 per cent compared to the January-June period of 2022 (-8.7% for international operations). However, demand in June was only 2.4 per cent below June 2019 levels (pre-pandemic). Cargo capacity, measured by available cargo tonne-kilometers (ACTKs), rose 9.7 per cent compared to June 2022, which was a slower rate compared to the double-digit growth recorded between March and May. This reflects strategic capacity adjustments airlines are making amid a weakened demand environment. Capacity for the first half of 2023 was up 9.9 per cent compared to a year ago. Capacity is now 3.7 per cent above June 2019 (pre-pandemic) levels.

Factors AFFECTING demand

In June, Purchasing Managers Index or PMI of manufacturing output and new export orders, which were 49.2 and 47.1, respectively, were below the critical threshold represented by the 50-mark indicating a decline in international manufacturing production and exports.

International cross-border trade decreased by 2.4 per cent year-over-year in May, reflecting the cooling demand environment and challenging macroeconomic conditions. The difference between the annual growth rates of air cargo and the global goods trade narrowed to -2.6 percentage points in May, representing the smallest gap since January 2022. However, the gap still suggests that air cargo continues to suffer more than container cargo from the slowdown in global trade.

“We remain hopeful that the difficult trading conditions for global air cargo will moderate as the inflation eases in the major economies. This, in turn, could encourage the central banks to loosen the money supply, which could stimulate greater economic activity around the globe,” said Willie Walsh, Director General, IATA.

Regional performance

The carriers in the Asia Pacific region posted a 32.4% increase in global air cargo volumes. This was a strong turnaround from decline registered in May. Cargo capacity increased by 11.1 per cent for the month. For the first half of the year, the global air cargo demand decreased by 5.6 per cent compared to an year ago, with an 11.2 per cent increase in cargo capacity.