Air cargo demand to rise by 4.5% in 2024: IATA

IATA indicates a strong demand for services in the New Year, in its data for global air cargo markets. Global demand, measured in cargo-tonne kilometres, rose by 3.8% in October 2023, while international belly capacity rose by 30.5%  year over year, says Willie Walsh, Director General, IATA.

CT Bureau

Looking at regional performance, the Middle East carriers are likely to register 12.3 per cent increase in cargo demand, African carriers a 1.5 per cent, North America 2.1 per cent, Asia Pacific 3.6 per cent, Europe 4.1 per cent and Latin America is expected to post an increase of 7.7 per cent in cargo demand in the New Year.

Rachel Yuting Fan, Senior Macro Economist, IATA, said, “The growth rate is based on a low base. Air cargo has been decreasing for the past two years, especially this year when it declined by 3.8 per cent, so the growth for next year is based on that.”

IATA is expecting cargo revenues to decline by 17.3 per cent year in 2024 to US$ 111.4 billion. The revenue decline is based on yields continuing to fall in the New Year by 20.9 per cent, driven by the continued growth of belly capacity related to strong growth on the passenger side of the business and trade stagnation.

However, yields will remain high by historical standards, IATA stated. The association, however, pointed out “yield progression has been extraordinary” in these past years (-8 in 2019, +54 in 2020, +25 in 2021, +7pc in 2022, -32 in 2023). Cargo’s share of the total airline revenues is expected to be 13 per cent next year, roughly in line with the 12 per cent recorded in 2019.

Meanwhile, IATA also stated that global demand, measured in cargo tonne-kilometres (CTKs*), increased in October 2023 by 3.8 per cent % compared to October 2022. For international operations, the demand lagged slightly at 3.5 per cent, it added.

Capacity, measured in available cargo tonne-kilometres (ACTKs), was up 13.1 per cent compared to October 2022 (11.1% for international operations). This was related to the growth in belly capacity. International belly capacity, for example, rose 30.5 per cent year over year on the strength of passenger markets.

  • Inflation in major advanced economies continued to ease from its peak in terms of CPI, reaching between 3 per cent and 4 per cent for the USA and for the EU, respectively, in October. China’s CPI, however, indicated deflation for the second time this year, raising concerns of an economic slowdown.
  • Global trade reversed its downward trajectory and stabilized in September. Although below its 2022 peak, global cross-border trade is over 5 per cent above pre-pandemic levels.