In what can be considered much-awaited good news, the International Air Transport Association (IATA) data for August 2023 global air cargo markets showed that year-on-year air cargo demand grew for the first time in 19 months. The demand increased 1.5% Y-o-Y as compared to August 2022 and capacity was up 12.2% compared to August 2022 (8% for international operations). According to IATA’s analysis, the growth is mostly related to a 30% Y-o-Y rise in belly capacity as airlines ramp up operations to meet peak-northern summer travel season demand.
“Air cargo demand grew by 1.5% 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.”Willie Walsh, IATA’s Director General
Economic challenges, specifically the ‘sustained annual contraction of trade’, remain a concern for the industry, pointed out IATA, while also pointing out the continued rise of inflation in the US. It also suggested that although China’s CPI growth reverted to positive from the July level, the country recorded a negative PPI in August for the 16th consecutive month. However, if global trade continues to weaken, air cargo demand may not significantly improve in the coming months, IATA warned.
The data also mentioned the following region-wise information:
Asia-Pacific airlines saw their air cargo volumes increase by 4.9% in August 2023 compared to the same month in 2022. This was a significant improvement in performance compared to July (+2.3%). Carriers in the region benefited from growth on two major trade lanes: Europe-Asia (up from 3.1% in July to 8.8% in August) and Middle East-Asia (up from 2.7% in July to 3.5% in August). Additionally, the within-Asia trade lane also performed better in August, with international CTKs contracting by 4.7% compared to the 9.7% annual decline in July. Available capacity for the region’s airlines increased by 28.5% compared to August 2022 as more belly capacity came online from the passenger side of the business.
North American carriers saw their air cargo volumes decrease by 1.2%. This was an improvement in performance compared to July (-5.4%). Carriers in the region benefitted from a slight improvement in growth on two major trade lanes: North America – Europe (2.9% annual contraction in August,1.2 percentage points better than in July) and Asia – North America (declined 4.2% in August compared to 4.4% decrease in July). Capacity increased 2.7% compared to August 2022.
European carriers saw their air cargo volumes decline by 0.2% in August compared to the same month in 2022. This was, however, an improvement in performance versus July (-1.0%). Volumes saw an increase due to the forementioned Europe–Asia performance and a small increase in the Middle East – Europe markets by 0.4%. Capacity increased 3.6% in August 2023 compared to 2022.
Middle Eastern carriers experienced a 1.4% year-on-year increase in cargo volumes in August 2023. This was an improvement from the previous month’s performance (-0.1%). 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% in June to 3.5% in August. Capacity increased 15.7% compared to August 2022.
Latin American carriers had the strongest performance in August 2023, with a 6.2% increase in cargo volumes compared to August 2022. This was a significant increase in performance compared to the previous month (+0.5%). Capacity in August was up 13.7% compared to the same month in 2022.
African airlines had the weakest performance in August 2023, with a 4.7% decline in cargo volumes compared to August 2022. This was a significant decrease in performance compared to July (+2.3%). Notably, Africa–Asia routes declined by 1.1% in August following an 11.2% growth in July. Capacity was 3.8% above August 2022 levels.