IATA: October demand improves MoM

Airlines saw lower demand in October although it trended upward compared to previous months as industry cargo tonne-kilometers (CTKs) increased 3.5% month over month in October but remained 13.6% lower than in 2021. Compared to October 2019, industry CTKs were down 6.2%. Seasonally adjusted (SA) demand also weakened for the month, dropping 2.3% MoM and 13.1% year over year, and falling 6.1% compared with 2019 levels, according to the International Air Transport Association’s (IATA) data for the month. Capacity, as measured in available cargo tonne-kilometers (ACTKs), grew 2% MoM in October, but as airlines implemented their winter schedules during the month, capacity dropped for the first time YoY since April to 0.6%, IATA reported. External factors — including rising inflation rates, weak global trade, Russia’s war in Ukraine and the “unusual strength” of the U.S. dollar — put downward pressure on air cargo growth, IATA said. The industry SA cargo load factor (CLF) fell 0.5 percentage points MoM in October to 47.6%, 13% lower than in 2021 but still 2% greater than pre-pandemic levels. Trade outlook Global trade activity “remains clouded,” according to IATA. The organization found that inflation “eased somewhat regarding consumer prices and producer price increases continued to cool down for the third consecutive month since July.” However, global trade volumes are predominately moving via ocean, IATA found. Air cargo’s growth performance versus maritime performance softened 16.1% YoY in September. International CTKs fell 10.5% YoY in October, a slight improvement from September’s 13.5% YoY drop. The Purchasing Managers’ Index (PMI) puts export orders at below the 50 mark; readings under 50 show a contraction in the manufacturing sector. Korea and China both had MoM growth in new export orders for October, but other major economies, like Germany, have been below 50 since March . “Any easing of COVID-19 restrictions in China including factory re-openings will support the global trade recovery,” IATA reported. North America International CTKs dropped among North American carriers 8.4% YoY, 1.7 percentage points lower than in September. North America, had a low CLF at 39.6% for October, as in September . Capacity among North American carriers grew 8% YoY and 8.7% compared to 2019 for international flights, and grew 2.4% YoY overall. Asia-Pacific The CLF among Asia Pacific airlines was the highest at 54.9% in October due to limited capacity on the trans-Pacific lane. Asia Pacific carriers, which hold the largest regional share of international CTKs at 29.5%, reported 13.1% YoY decline in volumes. Compared to pre-pandemic levels, airlines in Asia Pacific are still down 11.8% in total CTKs and 15.4% in ACTKs. Latin America Latin America continues to perform well, with the highest YoY growth in SA capacity, at 20.3%. Carriers in the region saw positive YoY growth in international CTKs, but only mildly at 0.3% compared with its double-digit jumps throughout the year. However, the SA CLF for Latin American carriers was 36.4%, the lowest of all regional airline groups. Europe, Middle East & Africa Airlines in Africa saw less capacity in October, dropping 7.5% YoY, seasonally adjusted. Africa’s SA CLF was 46.4%. International CTKs also fell 7.8 percentage points from September to an 8.3% YoY decline. The Ukraine war and the closure of Russian airspace continue to affect international CTKs among carriers in the Middle East and Europe, with reported YoY volumetric drops of 14.9% and 19%, respectively. European airlines also offered 5% fewer ACTKs YoY, and the subsequent CLF in Europe was 54.2%. In the Middle East, airlines saw 15% fewer volumes compared to October 2021 and 7.1% fewer than October 2019. Capacity grew 1% YoY but remains 7.5% lower than pre-pandemic levels, according to IATA.

IATA: October demand improves MoM

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