Asia-Pacific air cargo market wanes

Preliminary May 2023 traffic figures released by the Association of Asia Pacific Airlines showed that, while international passenger markets continue to grow amid the restoration of flights in the region, subdued demand and weak business confidence levels continue to hamper air cargo markets. In freight tonne kilometers (FTKs), air cargo demand fell by 7% year over year in May, according to the AAPA report. Offered capacity rose by 6% YoY, leading to an 8.5 percentage-point decline YoY in the average international freight load factor to 60.1% for the month. From January through May, air cargo demand fell 10.3% YoY, while offered capacity rose 1.7% YoY, leading to an 8.1 percentage-point decline YoY in the average international freight load factor to 61.3% for those months. “Air cargo demand remained soft, reflecting the prevailing weak global economic conditions and, in particular, the slowdown in the manufacturing sector,” AAPA Director General Subhas Menon said in the report. [caption id="attachment_57136945" align="alignnone" width="1024"] (Graph/AAPA[/caption] Menon does not expect the air cargo market to recover anytime soon. “Trade tensions are likely to weigh down on cargo markets for some time to come, whereas air travel demand is expected to demonstrate resilience in spite of the headwinds in the external environment,” he said. “Overall, the outlook for the airlines remains positive, with the recent moderation in oil prices providing some relief to operating expenditure even though the industry will continue to face inflationary cost pressures .” Cathay sees recovering figures Cathay Pacific , which released its May traffic figures this month as well, saw similar trends. Despite seeing a 2,345% YoY increase in passenger travel for the month, the carrier saw a comparatively modest increase in cargo. The carrier transported 109,834 tonnes of cargo in May, an 18.8% increase from May 2022, when its cargo capacity was significantly reduced due to stricter aircrew quarantine measures due to the pandemic. May 2023’s revenue FTKs increased 73.4% YoY. The cargo load factor decreased by 14.2 percentage points YoY to 61.5%, while capacity, measured in available FTKs, increased by 113.6% YoY. In the first five months of 2023, the tonnage increased by 28.2% against a 154.6% increase in capacity and a 107.2% increase in RFTKs, as compared with the same period for 2022. “Market volume remained largely flat in May,” Cathay Pacific Chief Customer and Commercial Officer Lavinia Lau said in the report. “High-tech demand and new consumer product shipments continued to underperform due to elevated inventory levels. However, the e-commerce market remained relatively active and, in the special solution segment, aircraft engine volumes improved as passenger services resumed.” Lau expects the air cargo market to remain flat throughout the summer. “In terms of cargo, the summer months are traditionally slower and any significant pickup in demand is not expected until the end of the third quarter,” she said. “We also anticipate more intense competition as overall cargo demand lags behind supply. As we rebuild our capacity through the expansion of the widebody passenger network, we will continue to source new demand and optimize our freighter schedules accordingly. Toronto and Miami will receive additional freighter capacity as a result.” Join Air Cargo Next for the second Air Cargo Tech Summit on Monday, Sept. 18, and Tuesday, Sept. 19, at the Brussels Marriott Hotel Grand Place in Belgium. For more information on the summit and to register, click here .

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