Despite falling volumes, cargo demand on rise

Global cargo demand, measured in cargo tonne-kilometers (CTKs*), increased by 1.9% as compared to September 2022 levels (+6% for international operations), according to IATA cargo analysis released recently. The Middle East carriers showed 2.5% year on year increase in cargo volumes. 

CT Bureau

IATA released data for September 2023 global air cargo markets, showing continuing demand recovery. “Air cargo eked out modest growth (1.9%) in September despite falling trade volumes and high jet fuel prices. That clearly shows the strength of air cargo’s value proposition. With the key export order and manufacturing PMIs hovering near positive territory, we can be cautiously optimistic for a strong year-end peak season,” said Willie Walsh, Director General, IATA.

Middle Eastern carriers had the strongest performance in September 2023, with a 2.5 per cent  year on year increase in cargo volumes. This was an improvement from the previous month’s performance (+1.3%). Carriers in the region benefited from growth in the Middle East–Asia (+7.0%) and Middle East–Europe markets (+3.3%). Capacity increased 16.1 per cent compared to September 2022.

Capacity, measured in available cargo tonne-kilometers (ACTKs), was up 12.1 per cent compared to September 2022 (+0% for international operations). Growth was largely related to international belly capacity, which rose 31.5 per cent year on year as airlines scaled up operations to meet peak-northern summer travel season demand.

Several factors in the operating environment include:

  • In September, both the manufacturing output Purchasing Managers Index (PMI 49.7) and new export orders PMI (47.7) saw a slight improvement. They remained, however, below the critical 50-point threshold, indicating a continuing, but slightly slower, annual decline in global manufacturing production and exports
  • Global cross-border trade contracted for the fifth month in a row in August, decreasing 3.8 per cent YOY. This reflects the cooling global macroeconomic environment
  • In September, the average price of jet fuel was US$131.0 per barrel, marking a 43.1 per cent increase from the May 2023 price. Recouping some of this added cost from surcharges in September contributed to the first increase in air cargo yields since November 2022

North American carriers had the weakest performance in September, with a 2.2 per cent fall in cargo volumes. This was a decline in performance as against to August (-1.4%). Although contractions in the North America-Asia trade lane narrowed (from -4.3% in August to -1.8% in September) and the North America-Europe market stabilized its decline at (-2.5%) for the second month in a row. Carriers in the region did not benefit significantly. Capacity increased moderately by 0.2 per cent compared to September 2022.

European carriers saw the volumes fall by 1.5 per cent in September compared to the same month in 2022. This was a weaker performance than in August (-0.6%). Carriers suffered from further contractions in the within Europe market (-5.7% in September vs -5.2% in August). Gains made from the expansion in the ME-Europe trade lane (+3.3% in September vs +0.5% in August) offset some declines from within Europe.  Capacity rose by 4.7 per cent in September 2023 compared to 2022.