Air cargo posts strongest first half-year growth since 2017, reports IATA

Willie Walsh

Global air cargo demand in June was up 9.9 per cent compared to the same month in 2019 (pre-Covid), measured in cargo tonne-kilometers (CTKs).

The International Air Transport Association (IATA) noted that this pushed first half-year air cargo growth to 8 per cent, the industry’s strongest first half performance since 2017 (when 10.2 per cent year-on-year growth was recorded).

Regional variations in performance were significant, the association said. North American carriers contributed 5.9 percentage points (ppts) to the 9.9 per cent growth rate in June. Middle East carriers contributed 2.1 ppts, European airlines 1.6 ppts, African airlines 0.5 ppts and AsiaPacific carriers 0.3 ppts. Latin American carriers did not support the growth, shaving 0.5 ppts off the total.

Overall capacity, measured in available cargo tonne-kilometers (ACTKs), remained constrained at 10.8 per cent below June 2019 due to the ongoing grounding of passenger aircraft. Belly capacity was down 38.9 per cent on June 2019 levels, partially offset by a 29.7 per cent increase in dedicated freighter capacity.

“Air cargo is doing brisk business as the global economy continues its recovery from the Covid-19 crisis,” said IATA’s director general Willie Walsh. “With first-half demand 8 per cent above pre-crisis levels, air cargo is a revenue lifeline for many airlines as they struggle with border closures that continue to devastate the international passenger business. Importantly, the strong first-half performance looks set to continue.”

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IATA also noted that underlying economic conditions and favourable supply chain dynamics remained supportive for air cargo. It noted that the US inventory to sales ratio is at a record low, meaning “businesses have to quickly refill their stocks, and typically use air cargo to do so”.

The Purchasing Managers Indices (PMIs) – an indicator of air cargo demand – showed that business confidence, manufacturing output and new export orders are growing at a rapid pace in most economies, IATA said. “Concerns of a significant consumer shift from goods to services have not materialised,” the association noted.

The cost-competitiveness and reliability of air cargo relative to that of container shipping has improved, IATA added. “The average price of air cargo relative to shipping has reduced considerably. And scheduling reliability of ocean carriers has dropped, in May it was around 40 per cent compared to 70-80 per cent prior to the crisis.”

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