Air cargo demand continues to strengthen

The global air cargo market showed modest growth in July, continuing a trend of recovery since February. Though July air cargo demand , measured in cargo tonne kilometers (CTKs), fell 0.8% year over year, it is a significant improvement from June, which saw a 3.4% YoY decline, according to data released Tuesday by IATA . “Although demand is now basically flat compared to 2022, this is an improvement on recent months’ performance that is particularly significant given declines in global trade volumes and rising concerns over China’s economy,” the IATA report stated. While demand is improving, increased capacity is still driving rates down. Capacity, measured in available CTKs (ACTKs), was up 11.2% YoY. “The strong uptick in ACTKs reflects the growth in belly capacity — 29.3% YoY — due to the summer season,” the report stated. “Compared to July 2022, demand for air cargo was basically flat,” IATA Director General Willie Walsh said in the report. “How this trend will evolve in the coming months will be something to watch carefully. Many fundamental drivers of air cargo demand, such as trade volumes and export orders, remain weak or are deteriorating. And there are growing concerns over how China’s economy is developing. “At the same time, we are seeing shorter delivery times, which is normally a sign of increasing economic activity,” Walsh said. “Amid these mixed signals, strengthening demand gives us good reason to be cautiously optimistic.” Global cross-border trade contracted for the third month in a row in June, decreasing 2.5% YoY, “reflecting the cooling demand environment and challenging macroeconomic conditions,” the IATA report noted. “While air cargo growth is still lagging world trade, the gap is the narrowest since January 2022.” July inflation was mixed, with the increase in U.S. consumer prices picking up pace for the first time in 13 months, and consumer and producer prices falling in China, pointing to a possible deflationary economy, according to IATA. [caption id="attachment_57138021" align="alignnone" width="1024"] (Photo/IATA)[/caption] Asia-Pacific Air cargo volumes in the Asia-Pacific region increased by 2.7% YoY, a significant improvement from June, which saw a 3.3% YoY decline. Carriers in the region benefited, according to IATA, from growth on three major trade lanes: Europe-Asia, up 3.2% YoY; Middle East-Asia, up 6.6% YoY; and Africa-Asia, up 10.3% YoY. The within-Asia trade lane also performed better in July, with an annual decline of international CTKs at 7.5% compared with the double-digit decreases observed since September 2022, according to IATA. Available capacity in the region increased by 26% YoY as more belly capacity came online from the passenger side of the business. North America North American carriers posted the weakest performance of all regions, with a 5.2% YoY decrease in cargo volumes, marking the fifth consecutive month in which the region had the weakest performance. However, July saw a slight improvement compared to June, which was down 5.9% YoY. The transatlantic route between North America and Europe saw traffic decline by 4.3% in July, 1.2 percentage points worse than the previous month. Capacity increased 0.5% YoY. Europe Air cargo volumes in Europe declined by 1.5% YoY, which was an improvement from June when volumes fell 3.2% YoY. Volumes were partially affected by contractions in the Middle East-Europe market of 1.2% and the within-Europe market of 5.1%. Capacity increased 5.3% YoY. Middle East Middle Eastern carriers saw a 1.5% YoY increase in cargo volumes, an improvement from June’s 0.6% YoY increase. The demand on Middle East-Asia routes has been trending upward in the past two months, according to IATA. Capacity increased 17.1% YoY. Latin America Latin American carriers posted a 0.4% YoY increase in cargo volumes, a drop in performance from June, which saw a 2.2% YoY increase. Capacity in July was up 10% YoY. Africa Africa had the strongest performance in July, with a 2.9% YoY increase in cargo volumes. Capacity was up 11% YoY. The clock is ticking! It is your last chance to join Air Cargo Next for its second annual Air Cargo Tech Summit on Sept. 18-19 in Brussels, sponsored by Unisys and Brussels Airport and featuring a fireside chat with Brian Hodges, managing director, American Airlines Cargo. For more details and to register, click here .

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