Slow improvement amidst insufficient capacity dampens air cargo in August, as per the latest data produced by the International Air Transport Association (IATA) for global air freight markets.
Demand moved slightly in a positive direction month-on-month; however, levels remain depressed compared to 2019. Improvement continues at a slower pace than some of the traditional leading indicators would suggest. This is due to the capacity constraint from the loss of available belly cargo space as passenger aircraft remain parked.
- Global demand, measured in cargo tonne-kilometers (CTKs*), was 12.6% below previous-year levels in August (-14% for international operations). That is a modest improvement from the 14.4% year-on-year drop recorded in July. Seasonally-adjusted demand grew by 1.1% month-on-month in August.
- Global capacity, measured in available cargo tonne-kilometers (ACTKs), shrank by 29.4% in August (‑31.6% for international operations) compared to the previous year. This is basically unchanged from the 31.8% year-on-year drop in July.
- Belly capacity for international air cargo was 67% below the levels of August 2019 owing to the withdrawal of passenger services amid the COVID-19 pandemic. This was partially offset by a 28.1% increase in dedicated freighter capacity. Daily widebody freighter utilization is close to 11 hours per day, the highest levels since these figures have been tracked in 2012.
- Economic activity continued to recover in August reflected, among other things, in the performance of the Purchasing Managers’ Index (PMI) indicator of economic health in the manufacturing sector:
- The new export orders component of the manufacturing PMI rose by 5.1% year-on-year, its best performance since late 2017.
- The PMI tracking global manufacturing output increased month-on-month and remained above the 50-mark, indicating growth.
“Air cargo demand improved by 1.8 percentage points in August compared to July. That’s still down 12.6% on previous year levels and well below the 5.1% improvement in the manufacturing PMI. Improvement is being stalled by capacity constraints as large parts of the passenger fleet, which normally carries 50% of all cargo, remain grounded. The peak season for air cargo will start in the coming weeks, but with severe capacity constraints shippers may look to alternatives such as ocean and rail to keep the global economy moving”~ Alexandre de Juniac, IATA’s Director General and CEO
August Regional Performance
Asia-Pacific airlines saw demand for international air cargo fall 18.3% in August 2020 compared to the same period a year earlier. After a robust initial recovery in May, month-on-month growth in seasonally-adjusted demand declined for the second consecutive month. International capacity is particularly constrained in the region, down 35%.
North American carriers reported that demand fell 4% compared to the previous year—the third consecutive month with a single-digit decline. European carriers reported a decrease in demand of 19.3% compared to the previous year. Improvements have been slight but consistent since April’s performance of -33%.
Middle Eastern carriers reported a decline of 6.8% in year-on-year international cargo volumes in August, a significant improvement from the 15.1% fall in July.
Latin American carriers reported demand steady at -26.1% compared to the previous year, ending three consecutive months of deteriorating demand. Capacity remains significantly constrained in the region with international capacity decreasing 38.5% in August, the largest fall of any region.
African airlines recorded demand increase by 1% in August. This was the fourth consecutive month in which the region posted the strongest increase in international demand and only instance of year-on-year growth among all regions in international volumes.