Air cargo demand rises 1.9% in September

Global air cargo markets are slowly but surely showing signs of demand recovery. Demand, measured in cargo tonne kilometers (CTKs), increased 1.9% in September compared with September 2022 levels, according to data released today by IATA . Capacity, measured in available CTKs, rose 12.1% year over year. IATA attributes this growth to the increase in international belly capacity, up 31.5% YoY, as passenger travel grows and airlines increase operations to meet peak northern summer travel season demand. “Air cargo eked out modest growth in September despite falling trade volumes and high jet fuel prices,” IATA Director General Willie Walsh said in a statement today. “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.” Not all industry leaders are similarly optimistic though. Singapore Airlines noted in its earnings report released Tuesday that demand “is expected to remain soft … dampened by excess inventories, geopolitical tensions and macroeconomic headwinds.” And Kuehne+Nagel Chief Executive Stefan Paul said in an Oct. 25 earnings call, “There was no peak season in Q3, [and] we do not expect an airfreight peak season [in Q4]. … Our expectation for Q4 this year is for volumes similar to that for Q3.” Factors that affected September’s airfreight markets, according to IATA, include: The manufacturing output purchasing managers index (PMI) at 49.7 and new export orders PMI at 47.7 were slight improvements month over month. However, “they remained … 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% YoY, a reflection of the cooling global macroeconomic environment; Annual growth in consumer prices in the United States stabilized at 3.7% YoY, the same rate as in August, while consumer price inflation in Europe and Japan slowed by 1 and 0.2 percentage points, respectively, to 4.9% and 3.0%, and, in China, deflation-fighting policy measures saw an annual rise in consumer prices of 0.1%; and The average price of jet fuel was $131 per barrel, marking a 43.1% increase from the May price. Recouping some of this added cost from surcharges in September contributed to the first increase in air cargo yields since November 2022. [caption id="attachment_57139097" align="alignnone" width="1024"] (Photo/IATA)[/caption] Asia Pacific Asia-Pacific airlines saw air cargo volumes increase 7.7% YoY, a robust improvement compared with August’s volume increase of 4.6% YoY. Carriers benefited from growth on three major trade lanes: Europe-Asia, up 9.6% YoY; Middle East-Asia, up 7% YoY; and Africa-Asia, up 12.8% YoY. Capacity increased 30.5% YoY as more belly capacity came online. One year ago, the key Asian markets of Japan and China were still largely under severe pandemic travel restrictions, IATA noted. North America North American carriers had the weakest performance in September, with a 2.2% YoY decrease in cargo volumes. This was a decline in performance compared with August, when volumes were down 1.4% YoY. Capacity increased 0.2% YoY. “Although contractions in the North America-Asia trade lane narrowed and the North America-Europe market stabilized its decline for the second month in a row, carriers in the region did not benefit significantly,” IATA stated. Europe European carriers saw volumes decline 1.5% YoY, a weaker performance than in August, when volumes declined 0.6% YoY. Carriers in the region suffered from further contractions in the within-Europe market, though this was somewhat offset by gains made from expansion in the Middle East-Europe trade lane. Capacity increased 4.7% YoY. Middle East Middle Eastern carriers had the strongest performance in September, with a 2.5% YoY increase in cargo volumes, an improvement from August’s performance, when volumes rose 1.3% YoY. Carriers in the region benefited from growth in the Middle East-Asia and Middle East-Europe markets. Capacity increased 16.1% YoY. Latin America Latin American carriers saw a 2.3% YoY increase in cargo volumes, a significant decrease compared with August, when volumes rose 6.2% YoY. Capacity was up 14.4% YoY. Africa African airlines saw volumes decline 0.1% YoY, despite demand growth on the Africa-Asia trade lane. This was an improvement compared with August, when volumes fell 3.5% YoY. Capacity rose 2.7% YoY.

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