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Air Cargo Demand Recovery Continues, IATA Reports

According to recent data from the International Air Transport Association (IATA), global air cargo markets experienced a year-on-year growth in August 2023, with the first increase in global air cargo demand in 19 months.

According to recent data from the International Air Transport Association (IATA), global air cargo markets experienced a year-on-year growth in August 2023, marking the first increase in 19 months.

The demand for air cargo, measured in cargo tonne-kilometers (CTKs), rose by 1.5% compared to August 2022 (1.2% for international operations).

Capacity, measured in available cargo tonne-kilometers (ACTKs), increased by 12.2% compared to August 2022 (11.8% for international operations). This rise was mainly driven by the expansion of belly capacity as airlines scaled up their operations to meet the peak demand during the summer travel season in the northern hemisphere.

Notable Factors In The Operating Environment

  • The manufacturing output Purchasing Managers Index (PMI) improved slightly to 49.4 in August, as did the new export orders PMI to 47.0. However, both indexes remained below the critical threshold of 50, indicating a slower decline in global manufacturing production and exports.
  • Global cross-border trade contracted for the fourth consecutive month in July, showing a 3.2% year-on-year decrease. This decline reflects the cooling demand and overall macroeconomic conditions.
  • In terms of inflation, August showed a mixed picture. While consumer prices in the US increased for the second consecutive month, Europe and Japan experienced a decrease in both consumer and producer prices. In China, which is combating deflationary pressures, consumer prices rose.

“Air cargo demand grew by 1.5% over the previous August. This is the first year-on-year growth in 19 months, so it is certainly welcome news. But it is off a low 2022 base, and market signals are mixed. Looking ahead, while many uncertainties remain, we can take some optimism from PMI data moving towards positive territory. This is particularly significant as we head into air cargo’s traditional peak year-end season,” said Willie Walsh, IATA’s Director General.

August Regional Cargo Performance

Asia-Pacific airlines 

Air cargo volumes increased by 4.9% in August 2023 compared to the same month in 2022. This was a significant performance improvement compared to July (+2.3%).  Carriers in the region benefited from growth on two major trade lanes: Europe-Asia (up from 3.1% in July to 8.8% in August) and Middle East-Asia (up from 2.7% in July to 3.5% in August). The within-Asia trade lane also performed better in August, with international CTKs contracting by 4.7% compared to the 9.7% annual decline in July. Available capacity for the region’s airlines increased by 28.5% compared to August 2022 as more belly capacity came online from the passenger side of the business. 

North American carriers 

Air cargo volumes decreased by 1.2%. This was a performance improvement compared to July (-5.4%). Carriers in the region benefitted from a slight improvement in growth on two major trade lanes: North America – Europe (2.9% annual contraction in August,1.2 percentage points better than in July) and Asia – North America (declined 4.2% in August compared to 4.4% decrease in July). Capacity increased by 2.7% compared to August 2022. 

European carriers

Air cargo volumes declined by 0.2% in August compared to the same month in 2022.  This was, however, an improvement in performance versus July (-1.0%). Volumes increased due to the Europe–Asia performance and a small increase in the Middle East – Europe markets by 0.4%. Capacity increased by 3.6% in August 2023 compared to 2022.

Middle Eastern carriers 

Carriers in the Middle East experienced a 1.4% year-on-year increase in cargo volumes in August 2023. This improved from the previous month’s performance (-0.1%). The demand in the Middle East–Asia market has been trending upward in the past three months, expanding its year-on-year growth from 1.8% in June to 3.5% in August. Capacity increased by 15.7% compared to August 2022. 

Latin American carriers 

Airlines in Latin America boasted the strongest performance in August 2023, with a 6.2% increase in cargo volumes compared to August 2022. This was a significant increase in performance compared to the previous month (+0.5%). Capacity in August was up 13.7% compared to the same month in 2022.  

African airlines 

Carriers in Africa had the weakest performance in August 2023, with a 4.7% decline in cargo volumes compared to August 2022. This was a significant decrease in performance compared to July (+2.3%). Notably, Africa–Asia routes declined by 1.1% in August, following an 11.2% growth in July. Capacity was 3.8% above the August 2022 levels.

IATA August Air Cargo Market Analysis

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