Air Cargo Management

Global air cargo markets record improved performance in May as China belatedly eases Omicron restrictions

Willie Walsh
photo_camera IATA's Willie Walsh

The belated easing of Omicron restrictions in China helped to alleviate supply chain constraints and contributed to an improved performance for global air cargo markets in May.

Global demand, as measured in cargo tonne-kilometres (CTKs), was 8.3 per cent below May 2021 levels (-8.1 per cent for international operations), according to International Air Transport Association (IATA) figures, but this was an improvement on the year-on-year decline of 9.1 per cent seen in April.

Capacity was 2.7 per cent above May 2021 (+5.7 per cent for international operations). This more than offset the 0.7 per cent year-on-year drop in April, according to IATA. Capacity expanded in all regions with Asia Pacific experiencing the largest growth.

IATA noted that air cargo performance was being impacted by several factors. Trade activity ramped-up slightly in May as lockdowns in China due to Omicron were eased. Emerging regions also contributed to growth with stronger volumes.

Additionally, new export orders – a leading indicator of cargo demand and world trade – decreased in all markets except China, IATA said.

The war in Ukraine also continues to impair cargo capacity used to serve Europe as several airlines based in Russia and Ukraine were key cargo players, the association noted.

Source: IATA. Click to enlarge
Air cargo market: 2022 vs 2019. Source: IATA. Click to enlarge

“May offered positive news for air cargo, most notably because of the easing of some Omicron restrictions in China. On a seasonally adjusted basis, we saw growth (0.3 per cent) after two months of decline,” said IATA’s director general Willie Walsh.

“The return of Asian production as Covid-19 measures eased, particularly in China, will support demand for air cargo. 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.”

Global CTKs seasonally adjusted. Click on charts to enlarge

Asia Pacific airlines saw air cargo volumes decrease by 6.6 per cent in May 2022 compared to the same month in 2021. This was a significant improvement over the 15.8 per cent decline in April, IATA noted. Airlines in the region have been heavily impacted by lower trade and manufacturing activity due to Omicron-related lockdowns in China however this started to ease in May as restrictions were lifted, the association added. Available capacity in the region fell 7.4 per cent compared to May 2021.

North American carriers posted a 5.7 per cent decrease in cargo volumes in May 2022 compared to May 2021. Demand in the Asia-North America market remained subdued, however, other key routes such as Europe – North America remain strong, IATA said. Capacity was up 6.8 per cent compared to May 2021. 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 said.

European carriers saw a 14.6 per cent decrease in cargo volumes in May 2022 compared to the same month in 2021 – the worst performance of all regions. This is attributable to the war in Ukraine, IATA explained, with labour shortages and lower manufacturing activity in Asia due to Omicron also affecting volumes. Capacity increased 3.3 per cent in May 2022 compared to May 2021.

Growth in global goods trade and CTKs

Middle Eastern carriers experienced a 11.6 per cent year-on-year decrease in cargo volumes in May. Significant benefits from traffic being redirected to avoid flying over Russia failed to materialise, IATA noted, which was “likely due to persisting supply chain issues in Asia”. Capacity was up 7.6 per cent compared to May 2021.

Latin American carriers reported an increase of 13.8 per cent in cargo volumes in May 2022 compared to May 2021 – the strongest performance of all regions. “Airlines in this region have shown optimism by introducing new services and capacity, and in some cases investing in additional aircraft for air cargo in the coming months,” IATA said. Capacity in May was up 33.3 per cent compared to the same month in 2021.

African airlines saw cargo volumes decrease by 1.5 per cent in May 2022 compared to May 2021. This was significantly slower than the growth recorded the previous month (6.3 per cent). Capacity was 3.0 per cent above May 2021 levels.

CTK growth versus global new export orders
International CTK growth (airline region of registration)

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