Global air cargo demand softened as economic headwinds persisted in November 2022, according to the International Air Transport Association (IATA).

Measured in cargo tonne-kilometres (CTKs), global demand fell 13.7 per cent compared to November 2021 (down 14.2 per cent for international operations).

Capacity (measured in available cargo tonne-kilometres, ACTK) was 1.9 per cent below November 2021. This was the second year-on-year contraction (the first was in October) since April 2022. International cargo capacity decreased 0.1 per cent compared to November 2021.

Compared to pre-Covid levels (November 2019), there was a smaller contraction in overall demand (10.1 per cent), while capacity was down 8.8 per cent, IATA said.

IATA said several factors in the operating environment should be noted. Global new export orders, which the association said is a leading indicator of cargo demand, were stable in October. For major economies, new export orders are shrinking except in Germany, the US, and South Korea, where they grew.

Global goods trade expanded by 3.3 per cent in October, IATA added. Given the softening in air cargo demand, this suggests that maritime cargo was the primary beneficiary.

Another factor is that the US dollar has appreciated sharply, adding cost pressure as many costs are denominated in US dollars. This includes jet fuel, which is already at elevated levels.

Finally, the Consumer Price Index for G7 countries decreased from 7.8 per cent in October to 7.4 per cent in November, the largest month-on-month decline in 2022. Inflation in producer (input) prices reduced to 12.7 per cent in November, its lowest level so far in 2022.

“Air cargo performance softened in November, the traditional peak season,” said IATA’s director general Willie Walsh. “Resilience in the face of economic uncertainties is demonstrated with demand being relatively stable on a month-to-month basis.

“But market signals are mixed. November presented several indicators with upside potential: oil prices stabilised, inflation slowed and there was a slight expansion in goods traded globally. But shrinking export orders globally and China’s rising Covid cases are cause for careful monitoring.”

Air cargo volumes among Asia Pacific airlines decreased by 18.6 per cent in November 2022 compared to the same month in 2021. IATA noted that this was the worst performance of all regions and a decline in performance compared to October (down 14.7 per cent). Airlines in the region continue to be impacted by lower levels of trade and manufacturing activity and disruptions in supply chains due to China’s rising Covid cases, the association added. Available capacity in the region decreased by 4.5 per cent compared to 2021.

North American carriers posted a 6.6 per cent decrease in cargo volumes in November 2022 compared to the same month in 2021. This was an improvement in performance compared to October, when there was a decrease of 8.6 per cent, IATA said. Capacity increased 0.3 per cent compared to November 2021.

European carriers saw a 16.5 per cent decrease in cargo volumes in November 2022 compared to the same month in 2021. This was an improvement in performance compared to October (down 18.8 per cent), thanks to the stronger new export orders in Germany. Airlines in the region continue to be most affected by the war in Ukraine. High inflation levels, most notably in Türkiye, also affected volumes. Capacity decreased 6.6 per cent in November 2022 compared to November 2021.

Middle Eastern carriers experienced a 14.7 per cent year-on-year decrease in cargo volumes in November 2022. This was a marginal improvement to the previous month (a 15.0 per cent dcrease), IATA said. Cargo volumes to/from Europe impacted the region’s performance, registering a 16.3 per cent year-on-year decline in November. Capacity increased 2.1 per cent compared to November 2021.

Latin American carriers reported a 2.8 per cent increase in cargo volumes in November 2022 compared to November 2021, according to IATA. This was the strongest performance of all regions, and a significant improvement in performance compared to October (-1.4 per cent). Capacity in November was up 2.8 per cent compared to the same month in 2021.

African airlines saw cargo volumes decrease by 6.3 per cent in November 2022 compared to November 2021. This was an improvement in performance compared to the previous month (-8.3 per cent). Capacity was 11.4 per cent below November 2021 levels.