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IATA: Air Cargo Demand Contraction Eases

The International Air Transport Association’s (IATA) Global Air Cargo Market Data for June 2023 

The International Air Transport Association (IATA) unveiled data for the global air cargo markets in June 2023. The report revealed a year-over-year contraction in demand, the most modest contraction since February 2022. 

Global Demand and Capacity: A Detailed Analysis 

When measured in cargo tonne-kilometers (CTKs), global demand witnessed a 3.4% decrease compared to June 2022, with international operations posting a slightly higher decrease at 3.7%. However, in the year’s first half, demand fell by 8.1% compared to the same period in 2022, which expanded to 8.7% for international operations. Despite these figures, it’s worth noting that demand in June was merely 2.4% below what it was in June 2019, during the pre-pandemic era. 

On the other hand, capacity, as quantified by available cargo tonne-kilometers (ACTKs), increased by 9.7% compared to June 2022. This growth rate was slower than the double-digit growth rates recorded between March and May, reflecting airlines’ strategic capacity adjustments in response to a weakened demand environment. For the first half of 2023, capacity rose by 9.9% compared to the previous year’s period. In fact, capacity is now 3.7% above where it was in June 2019, before the pandemic. 

Key Factors Influencing Air Cargo Demand 

  • Global cross-border trade fell 2.4% year-over-year in May, indicating a cooling demand environment and challenging macroeconomic conditions. The difference between the annual growth rates of air cargo and the global goods trade was compressed to -2.6 percentage points in May, the smallest gap since January 2022. Despite this, the gap suggests that the global trade slowdown has hit air cargo harder than container cargo.
  • In June, the manufacturing output Purchasing Managers Index (PMI) at 49.2 and new export orders PMI at 47.1 were below the critical threshold represented by the 50 mark. This indicates a decline in global manufacturing production and exports.

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

IATA: Air Cargo Market Detail (Table)

WorldJune 2023 (% year-on-year)
share1CTKACTKCLF (%-pt)2CLF (level)3
TOTAL MARKET100.0%-3.4%9.7%-5.8%43.2%
   Africa2.0%-2.8%-3.7%0.4%44.6%
   Asia Pacific32.4%-3.6%24.4%-13.6%46.8%
   Europe21.8%-2.8%4.4%-3.5%47.6%
   Latin America2.7%7.3%15.4%-2.5%33.7%
   Middle East13.0%0.5%11.1%-4.7%44.6%
   North America28.1% -6.5%0.7%-2.9%37.4%
       
1% of industry CTKs in 2022  2Year-on-year change in load factor3Load factor level
Source: IATA

Exploring the Airline Cargo Regional Performance in June

Asia-Pacific Carriers

In June 2023, Asia-Pacific carriers recorded a 3.6% decrease in air cargo volumes compared to the same month in the previous year. This represented a further decline from the -2.5% noted in May, attributed largely to weakened demand within Asian markets. Despite this, the trade route between Asia and North America saw enhanced performance. The region’s available capacity saw a significant surge, up 24.4% compared to June 2022. In the first half of 2023, cargo demand fell by 6.5% compared with the same period in 2022, even amidst a 27.0% increase in capacity. 

North American Carriers 

North American carriers experienced a 6.5% decrease in total cargo volumes in June 2023, marking the fourth straight month of the region registering the weakest performance. However, this improved from the 8.6% decrease recorded in May. Cargo Tonnes Kilometres (CTKs) between Europe and North America contracted a mere 2.7% in June, following three consecutive months of double-digit contractions. The region saw a marginal capacity increase of 0.7% in June 2023 compared to the same month in 2022. During the first half of 2023, cargo demand dipped 10.5% compared to the same period in 2022, while capacity slipped 0.7%. 

European Carriers 

In June 2023, European carriers saw a 2.8% decrease in cargo volumes compared to the same month in 2022. There was an improvement from May, when the decrease was 6.6%, partially due to the improved Europe-North America performance. June 2023 saw an increase in capacity of 4.4% compared to June 2022. Cargo demand for the first half of 2023 was down 10.2% compared to the same period in 2022, while capacity rose 2.5% during the same period. 

Middle Eastern Carriers 

Middle Eastern carriers marked a 0.5% increase in cargo volumes in June 2023 compared to the same period a year ago. This marked a significant recovery from the 2.9% year-over-year decline registered in May. Capacity for the month increased by 11.1%. Both the Middle East-Asia and Middle East-Europe route areas recorded annual growth. For the first half of the year, cargo demand was down 5.6% compared to the same period in 2022, countered by an 11.2% increase in capacity. 

Latin American Carriers 

In June 2023, Latin American carriers boasted the strongest performance, with a 7.3% increase in cargo volumes compared to June 2022. This was an improvement from the 3.8% increase recorded in May. Capacity in June 2023 was up by 15.4% compared to the same month in 2022. In the first half of 2023, cargo demand saw a slight increase of 0.9% compared to the same period in 2022, while capacity soared by 18.0%. 

African Airlines 

African airlines registered a 2.8% decrease in demand in June 2023 compared to June 2022. This marked a decline from the 1.9% decrease observed in May. Capacity in June 2023 dropped by 3.7% compared to the same month in the previous year. For the year’s first half, cargo demand slowed by 4.4%, while capacity experienced a 1.6% increase.

Why Airline Cargo Matters

Airlines significantly carry goods and supplies we need daily, ranging from short-life food supplies, critical medical supplies, live cattle, and race horses to computer chips. While many airlines operate dedicated cargo planes, a significant part of daily cargo transport globally travels in the hold of passenger planes. This helps transport goods closer to where they are needed most. 

During the COVID-19 pandemic, airlines helped distribute goods worldwide by converting their passenger planes to carry more cargo. They also played an important role in the global distribution of COVID-19 vaccines. 

Airline cargo revenue helps to keep passenger airfares affordable.

Learn more about airline cargo on passenger planes.  

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