IATA: Airfreight demand remains soft in November

The fourth quarter 2022 saw a softer airfreight market, as November demand remained depressed compared with 2021 and 2019 levels. Industry cargo tonne-kilometers (CTKs) fell 13.7% compared with November 2021 and were 10.1% lower compared with November 2019, according to the latest traffic figures from the International Air Transport Association (IATA). Demand inched down 1.9% from 21 billion CTKs in October to 20.6 billion CTKs in November. “The weaker air cargo demand is a result of multiple headwinds,” according to IATA. “Inflation remains high, curtailing the spending capacity of households. The ongoing war in Ukraine disrupts trade flows, and the unusual strength of the U.S. dollar makes commodities traded in U.S. dollar more expensive in local currency terms.” From January to November 2022, airlines carried 229.4 billion CTKs, around 7.4% less YoY and 1.1% lower than 2019 levels, according to the IATA report. Capacity shrunk in November as airlines responded to supply and demand imbalances, dropping 2% year over year. The seasonally adjusted (SA) cargo load factor (CLF) for November fell to 47.2%, declining for the fourth month in a row. International CTKS saw their greatest YoY drop at 14.2% in November, down 0.5 percentage points from October. Global trade uptick In October, global goods trade increased 3.3% YoY, 3 percentage points short of September’s 6% YoY increase, “however, given that the YoY growth of global CTK in October was a negative 13.6%, this suggests that most of the growth in global trade benefited maritime transport,” IATA reported. Global export orders stayed around the same level in October, hinting at a new trend of lower export volumes. See also: Consultant Insight: US manufacturing activity slows Since July 2022, new export orders have seen a 9% YoY decline, which IATA hypothesizes could signal a stabilization in air cargo demand since a historical relationship exists between new export orders and industrywide CTKs. North America International CTKs fell 7.4% from North America, 2.5 percentage points fewer than in October. Total CTKs for North American carriers in November was down 6.6% YoY and up 7.5% compared with 2019. Airlines in North America had a load factor of 41.9%, 3.1 percentage points less than in 2021, but a growth of 0.3 percentage points compared with the same month in 2019. Asia-Pacific Airlines in Asia Pacific had the greatest YoY decline in international CTKs at a drop of 17.7%, tied to rising COVID-19 cases and shrinking export orders, IATA shared. Asia Pacific carriers continue to hold the largest air cargo market share at 32.6%, but an 18.6% YoY drop in total CTKs impacts overall market demand. For November, the Asia Pacific region saw a CLF of 54.5%, 5.1 percentage points higher than the month’s global average. Latin America Latin American carriers had a strong performance in international CTKs, the only region to see positive YoY change at 7% in November, compared with 0.3% YoY growth in October . However, the region’s capacity and volumes remain depressed compared with pre-pandemic levels and are down 9.2% for ACTKs and 10.2% for CTKs. While Latin America’s airlines saw a load factor of 38.2%, the lowest of all the regions, this is indicative of returning market supply, IATA notes in the report. Europe, Middle East & Africa Meanwhile, airlines in Europe continue to be affected by Russia’s war in Ukraine, with international CTKs falling 17.1% YoY in November. However, intra-European activity saw a rebound in SA CTKs in November — up 6.4 percentage points from October — tied to new export orders from Germany. European carriers had the best load factor for November at 56.9%, down 6.8 percentage points from 2021 but up 0.1 percentage points from 2019. Middle Eastern carriers saw international air cargo volumes decline 14.6% YoY and global volumes fall 14.7% YoY. The region had a load factor of 47.5%, 1.6 percentage points shy of the market average. In Africa, airlines’ international and total CTKs were down 6.3% YoY. And compared with 2019, African carriers saw 6.2% fewer volumes and 17.3% less capacity, as measured in CTKs and ACTKs, respectively. The regional load factor was 45.8%, up 2.5 percentage points compared with 2021.

IATA: Airfreight demand remains soft in November

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