IATA: Global capacity improves with Asia production

Global airfreight markets saw improvements in May as COVID-19 restrictions were lifted in China, easing supply chain constraints as capacity rebounded across regions. Capacity, measured in international available cargo tonne-kilometers (ACTKs), grew 2.7% year over year in May. Additionally, international operations grew 5.7% YoY, with the largest growth in the Asia-Pacific region, according to a report today from the International Air Transport Association (IATA). This pushed industrywide cargo load factors down 6.1 percentage points YoY to 50.4% in May. [caption id="attachment_57065592" align="alignright" width="471"] Photo/DSV[/caption] Europe and the Middle East reported the largest declines in load factors in May due to a high rate of demand not matched by capacity, IATA reported. Meanwhile global demand measured in cargo tonne-kilometers (CTKs) decreased 8.3% YoY in May and dropped 8.1% for international cargo operations, an improvement compared to April’s 9.1% decrease YoY . The global cargo load factor was 50.4% in May, a drop of 6.1 percentage points YoY and 2 percentage points lower compared to April. Supply chain disruptions have also continued to see improvement; this is expected to support growth in manufactured goods trade, which has been on the decline during the past few months. IATA noted that this may spark growing demand for airfreight in the coming months. However, export orders were not ”buoyant,“ in May, which is typically a leading indicator for airfreight activity, IATA reported. In addition to China, most major economies have either declined or sidelined at levels below the 50 mark , indicating a contraction in the manufacturing sector. “The return of Asian production as COVID-19 measures eased, particularly in China, will support demand for air cargo,” IATA Director General Willie Walsh said in the release. “And the strong rebound in passenger traffic has increased belly capacity, although not always in the markets where the capacity crunch is most critical. But uncertainty in the overall economic situation will need to be carefully watched.” Asia-Pacific Carriers in the Asia-Pacific region reported total cargo volumes were 6.6% lower in YoY, but this was still marked improvement compared to the 15.8% drop YoY in April. International CTKs only declined 4% YoY in May, compared to 7% in April. Total ACTKs in May were also 7.4% lower YoY, as airlines continue to feel the impact of reduced trade and manufacturing activity due to COVID-19 restrictions, but international ACTKS grew 3.3% YoY, according to the report. Latin America Latin American carriers saw an increase in cargo volumes in May, with a 13.8% growth YoY in total CTKs and 15.1% increase in international CTKs. Monthly volumes shrank month over month by 5% but overall had strong performance. Carriers introduced new services and invested in additional aircraft for airfreight, growing capacity for the month 33.3% YoY, IATA reported. North America Carriers in North America saw a 5.7% drop YoY in total CTKs in May but a 6.8% growth YoY in capacity. The North America-Asia market “remain subdued,” but routes to Europe provided stability, according to the report. “Several carriers in the region are set to receive delivery of freighters this year, which should help address pent-up demand on routes where it is needed if economic headwinds don’t persist,” IATA noted. Cargojet, CAM and Calm Air were among the North American carriers to acquire or lease freighters in May , according to data from Air Cargo World’s sister publication, Cargo Facts. Europe, Middle East, Africa Europe was the region that saw the worst performance in May, with European carriers reporting a 14% decrease YoY in CTKs both in total and internationally — the sharpest fall since January — mostly attributed to the war in Ukraine and labor shortages . Total capacity rose slightly, 3.3%, compared to 2021. Despite closed Russian airspace redirecting some traffic to the Middle East, IATA reported that, overall, carriers in the region did not see significant benefits for the second month , likely due to supply chain issues in Asia. Meanwhile, carriers in the Middle East also experienced reduced cargo volumes in May, with an 11.6% YoY decline in total and international CTKs, but increased total capacity 7.6% compared to 2021 levels. May total and international volumes decreased in Africa 1.5% YoY, but total capacity remained 3% higher YoY.

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