Data released for June 2023 global air cargo markets by the International Air Transport Association (IATA) shows the smallest year-over-year contraction in demand since February 2022.

Global demand, measured in cargo tonne-kilometres (CTKs), fell 3.4 per cent in June compared to June 2022 (-3.7 per cent for international operations). For the half year, demand slid 8.1 per cent compared to the January-June period of 2022 (-8.7 per cent for international operations). However, demand in June was only 2.4 per cent below June 2019 (pre-pandemic) levels.

For capacity, measured by available cargo tonne-kilometres (ACTKs), numbers rose 9.7 per cent compared to June 2022, which was a slower rate compared to the double-digit growth recorded between March and May. IATA states this reflects strategic capacity adjustments that airlines are making amid a weakened demand environment. Capacity for the first half of 2023 was up 9.9 per cent compared to a year ago, with capacity now 3.7 per cent above June 2019 (pre-pandemic) levels.

IATA reports there are several key factors influencing air cargo demand, including global cross-border trade decreasing by 2.4 per cent year-over-year in May, reflecting the cooling demand environment and challenging macroeconomic conditions. The difference between the annual growth rates of air cargo and the global goods trade narrowed to -2.6 percentage points in May, representing the smallest gap since January 2022. However, the gap still suggests that air cargo continues to suffer more than container cargo from the slowdown in global trade.

For June, IATA states that both manufacturing output Purchasing Managers Index or PMI (49.2) and new export orders PMI (47.1) were below the critical threshold represented by the 50 mark, indicating a decline in global manufacturing production and exports.

Willie Walsh, IATA’s director general, said: “We remain hopeful that the difficult trading conditions for air cargo will moderate as inflation eases in major economies. This, in turn, could encourage the central banks to loosen the money supply, which could stimulate greater economic activity.”

When looking at regional performance for the period, Asia-Pacific airlines witnessed their air cargo volumes decrease by 3.6 per cent in June 2023 compared to the same month in 2022, but available capacity in the region increased by 24.4 per cent compared to June 2022.

North American carriers had a 6.5 per cent decrease in total cargo volumes in June 2023 compared to the same month in 2022, marking the fourth consecutive month in which the region had the weakest performance. However, this was an improvement compared to May (-8.6 per cent).

European carriers experienced a 2.8 per cent decrease in cargo volumes in June 2023, compared to the same month in 2022. This was an improvement in performance compared to May (-6.6 per cent), in part due to the aforementioned Europe-North America performance. European capacity increased 4.4 per cent compared to June 2022. Cargo demand was down 10.2 per cent for the first six months of 2023 compared to last year, as the half-year capacity rose 2.5 per cent.

Middle Eastern carriers posted a 0.5 per cent increase in cargo volumes in June 2023 versus a year ago. IATA states this was a strong turnaround from the 2.9 per cent year-over-year decline registered in May. Capacity rose 11.1 per cent for the month. Both the Middle East-Asia and Middle East-Europe routes saw annual growth. For the first half of the year, cargo demand was down 5.6 per cent compared to a year ago, with an 11.2 per cent hike in capacity.

Latin American carriers had the strongest performance in June 2023, with a 7.3 per cent increase in cargo volumes compared to June 2022. This was a 3.8 per cent improvement compared to May. Capacity in June was up 15.4 per cent over the same month in 2022. For the 2023 first half, cargo demand was up 0.9 per cent versus a year ago, while capacity climbed 18.0 per cent.

African airlines posted a 2.8 per cent decrease in demand compared to June 2022, and a decline in performance compared to the previous month (-1.9 per cent). Capacity in June was down 3.7 per cent compared to the same month in 2022. For the first half of the year, cargo demand slowed by 4.4 per cent while capacity climbed 1.6 per cent.

The full ‘Air Cargo Market Analysis’ for June 2023 can be found on the IATA website.