Data released for August 2023 global air cargo markets by the International Air Transport Association (IATA) shows that year-on-year air cargo demand grew for the first time in 19 months.
Global demand, measured in cargo tonne-kilometres (CTKs), increased by 1.5 per cent compared to August 2022 levels (1.2 per cent for international operations).
For capacity, measured in available cargo tonne-kilometres (ACTKs), was up 12.2 per cent compared to August 2022 (11.8 per cent for international operations). IATA reports this was largely related to belly capacity which rose 30 per cent year-on-year as airlines ramped-up operations to meet peak-northern summer travel season demand.
IATA reports there are several factors influencing air cargo demand.
In August, both the manufacturing output Purchasing Managers Index or PMI (49.4) and new export orders PMI (47.0) saw a slight improvement to the previous month. They remained, however, below the critical threshold represented by the 50 mark, indicating a continuing, if slower, annual decline in global manufacturing production and exports.
Global cross-border trade contracted for the fourth month in a row in July, decreasing 3.2 per cent year-over-year. IATA says this reflects the cooling demand environment and general macroeconomic conditions.
Inflation saw a mixed picture in August, with an increase in US consumer prices for the second month in a row. Meanwhile in Europe and Japan, consumer and producer prices fell. In China, which is fighting deflationary pressures, consumer prices rose.
Willie Walsh, IATA’s director general, said: “Air cargo demand grew by 1.5 per cent over the previous August. This is the first year-on-year growth in 19 months, so it is certainly welcome news.
“But it is off a low 2022 base and market signals are mixed. Looking ahead, while many uncertainties remain, we can take some optimism from PMI data moving towards positive territory.
“This is particularly significant as we head into air cargo’s traditional peak year-end season.”
When looking at regional performance for the period, Asia-Pacific airlines saw their air cargo volumes increase by 4.9 per cent in August 2023 compared to the same month in 2022. This was a significant improvement in performance compared to July (+2.3 per cent).
IATA reports that carriers in the region benefited from growth on two major trade lanes: Europe-Asia (up from 3.1 per cent in July to 8.8 per cent in August) and Middle East-Asia (up from 2.7 per cent in July to 3.5 per cent in August).
Additionally, the within-Asia trade lane also performed better in August, with international CTKs contracting by 4.7 per cent compared to the 9.7 per cent annual decline in July. Available capacity for the region’s airlines increased by 28.5 per cent compared to August 2022 as more belly capacity came online from the passenger side of the business.
For North American carriers, their air cargo volumes decrease by 1.2 per cent. This was an improvement in performance compared to July (-5.4 per cent).
Carriers in the region benefitted from a slight improvement in growth on two major trade lanes: North America-Europe (2.9 per cent annual contraction in August, 1.2 percentage points better than in July) and Asia-North America (declined 4.2 per cent in August compared to 4.4 per cent decrease in July). Capacity increased 2.7 per cent compared to August 2022.
Air cargo volumes for European carriers declined by 0.2 per cent in August compared to the same month in 2022. This was, however, an improvement in performance versus July (-1.0 per cent).
Volumes saw an increase due to the aforementioned Europe-Asia performance and a small increase in the Middle East-Europe markets by 0.4 per cent. Capacity increased 3.6 per cent in August 2023 compared to 2022.
IATA reports that Middle Eastern carriers experienced a 1.4 per cent year-on-year increase in cargo volumes in August 2023. This was an improvement from the previous month’s performance (-0.1 per cent).
The demand on the Middle East-Asia market has been trending upward in the past three months, expanding its year-on-year growth from 1.8 per cent in June to 3.5 per cent in August. Capacity increased 15.7 per cent compared to August 2022.
African airlines had the weakest performance in August 2023, with a 4.7 per cent decline in cargo volumes compared to August 2022. This was a significant decrease in performance compared to July (+2.3 per cent). Notably, Africa-Asia routes declined by 1.1 per cent in August following an 11.2 per cent growth in July. Capacity was 3.8 per cent above August 2022 levels.
Latin American carriers had the strongest performance in August 2023, with a 6.2 per cent increase in cargo volumes compared to August 2022. This was a significant increase in performance compared to the previous month (+0.5 per cent). Capacity in August was up 13.7 per cent compared to the same month in 2022.
The full ‘Air Cargo Market Analysis’ for August 2023 can be found on the IATA website.