Demand for air cargo decreased by 10.6 per cent in 2020, the largest drop in year-on-year demand since The International Air Transport Association (IATA) started to monitor cargo performance in 1990, outpacing the 6 per cent fall in global trade in goods.
In its market analysis of the year, it found that global demand in 2020, measured in cargo tonne-kilometers (CTKs), was 10.6 per cent below 2019 levels, up to -11.8 per cent for international operations.
Global capacity, measured in available cargo tonne-kilometers (ACTKs), shrank by 23.3 per cent in 2020, 24.1 per cent for international operations compared to 2019 which it says was more than double the contraction in demand. And due to the lack of available capacity, cargo load factors rose 7.7 per cent in 2020. This contributed to increased yields and revenues, providing support to airlines and some long-haul passenger services in the face of collapsed passenger revenues.
It also said that improvements towards yearend were demonstrated in December when global demand was 0.5 per cent below previous-year levels, up to -2.3 per cent for international operations. Global capacity was 17.7 per cent below previous-year levels, at ‑20.6 per cent for international operations. That is much deeper than the contraction in demand, indicating the “continuing and severe capacity crunch”. And with the stalling of the recovery in passenger markets, “there is no end in sight for the capacity crunch”.
The report further noted that economic conditions are picking up as we move into 2021. The new export orders component of the manufacturing Purchasing Managers’ Index (PMI) is in growth territory in both developed and emerging markets. And global industrial production has also recovered.
IATA’s director general and CEO, Alexandre de Juniac, said: “Air cargo is surviving the crisis in better shape than the passenger side of the business. For many airlines, 2020 saw air cargo become a vital source of revenues, despite weakened demand. But with much of the passenger fleet grounded, meeting demand without belly capacity continues to be an enormous challenge. And, as countries strengthen travel restrictions in the face of new coronavirus variants, it is difficult to see improvements in passenger demand or the capacity crunch. 2021 will be another tough year.”
European carriers reported a 16.0 per cent drop in demand in 2020 compared to 2019, -16.2 per cent for international operations and a fall in capacity of 27.1 per cent, at -27.1 per cent for international operations. In December airlines posted a decrease in international demand of 5.6 per cent compared to the previous year.
After a pause in recovery in November, seasonally adjusted demand grew 7 per cent month-on-month in December, the largest rise of all regions. However, it says that new lockdowns and adverse economic conditions in the region risk the recovery. Lack of capacity remains a challenge, as international capacity decreased 19.4 per cent in December.
Middle Eastern carriers reported a decline in demand of 9.5 per cent in 2020 compared to 2019 (-9.5 per cent for international operations) and a fall in capacity of 20.9 per cent, down to -20.6 per cent for international operations.
After a slight slowdown in recovery in November, carriers in the region performed well in December, posting a 2.3 per cent increase in international demand. International capacity also decreased by 18.2 per cent in December, unchanged from November.
Latin American carriers reported a decline in demand of 21.3 per cent in 2020 compared to 2019 (-20.3 per cent for international operations) and a fall in capacity of 35 per cent down to -33.6 per cent for international operations.
In December international cargo volumes fell by 19.0 per cent compared to the previous year. Air cargo recovery in the region has been affected by adverse economic conditions in markets such as Mexico, Argentina and Peru. Capacity remains highly constraint in the region. International capacity decreased in December by 36.7 per cent, a steepening of the 30.4 per cent fall in November.
African airlines saw demand grow by 1.0 per cent in 2020 compared to 2019, up to 1.9 per cent for international operations and a fall in capacity of 17.3 per cent (-15.8 per cent for international operations).
African airlines posted the strongest international growth of all regions in 2020 as well as in December. International demand in the month grew by 6.3 per cent year-on-year. African airlines now have the same share of the global international cargo market as carriers from Latin America (2.4 per cent). International capacity decreased by 21.6 per cent in December, a steepening of the 18.6 per cent fall in November.