Air Cargo Management

Headwinds continued to affect global air cargo demand in October, reports IATA

Willie Walsh

Global air cargo demand fell 13.6 per cent in October, as measured in cargo tonne-kilometres (CTKs), compared to the same month in 2021. For international operations, there was a 13.5 per cent decline.

That’s according to the latest International Air Transport Association (IATA) figures, with the organisation noting that headwinds continue to affect air cargo demand.

Capacity was 0.6 per cent below October 2021 – the first year-on-year contraction since April 2022. Month-on-month capacity increased by 2.4 per cent in preparation for the year-end peak season. International cargo capacity grew 2.4 per cent compared to October 2021.

Source: IATA. Click to enlarge.

IATA noted several factors in the operating environment. New export orders, a leading indicator of cargo demand, are shrinking in all markets except China and South Korea, which registered slightly higher new export orders in October, the organisation said.

The latest global goods trade figures showed a 5.6% expansion in September, a positive sign for the global economy, noted IATA. This is expected to primarily benefit maritime cargo, with a slight boost to air cargo as well.

Global CTKs, actual and seasonally adjusted. Click to enlarge
Growth in global goods trade and CTKs. Click to enlarge

The US dollar has seen a sharp appreciation, with the broad real effective exchange rate in September 2022 reaching the highest level since 1986. A strong dollar affects air cargo, IATA said. As many costs are denominated in dollars, the currency’s appreciation adds another layer of cost on top of high inflation and high jet fuel prices.

Finally, the Consumer Price Index increased slightly in G7 countries in October and remains at a decades’ high level of 7.8 per cent. Inflation in producer (input) prices reduced by 0.5 percentage points to 13.3 per cent in September.

ACTK levels, actual and seasonally adjusted. Click to enlarge

“Air cargo continues to demonstrate resilience as headwinds persist. Cargo demand in October – while tracking below the exceptional performance of October 2021 – saw a 3.5 per cent increase in demand compared to September,” said IATA’s director general Willie Walsh.

“This indicates that the year-end will still bring a traditional peak-season boost despite economic uncertainties. But as 2022 closes out it appears that the current economic uncertainties will follow into the New Year and need continued close monitoring.”

CTK growth versus global new export orders. Click to enlarge

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