Date: Friday, November 11th, 2022
Source: Sourcing Journal
A new report on global air cargo for September from the International Air Transport Association (IATA) shows demand descending to levels on par with pre-pandemic activity.
Global demand fell 10.6 percent compared to September 2021, but continued to track at near pre-pandemic levels, IATA said. Capacity was 2.4 percent above September 2021 but still 7.4 percent below September 2019 levels.
IATA pointed to several factors influencing the results. Following contractions across major economies, the global Purchasing Managers Index for new export orders contracted to its lowest level in two years. The latest global goods trade figures showed a 5.2 percent expansion in August, a positive sign for the global economy that is expected to primarily benefit maritime cargo, however, with only a slight boost to air cargo.
Oil prices remained stable in September and while jet puel costs declined from June’s peak, according to IATA. At the same time, the Consumer Price Index stabilized in G7 countries in September, but at a decades high level of 7.7 percent.
“While air cargo’s activity continues to track near to 2019 levels, volumes remain below 2021’s exceptional performance as the industry faces some headwinds,” said Willie Walsh, IATA’s director general. “At the consumer level, with travel restrictions lifting post-pandemic, people are likely to spend more on vacation travel and less on e-commerce. And at the macro-level, increasing recession warnings are likely to have a negative impact on the global flows of goods and services, balanced slightly by a stabilization of oil prices.”
“Against this backdrop, air cargo is bearing up well,” Walsh added. “And a strategic slowdown in capacity growth from 6.3 percent in August to 2.4 percent in September demonstrates the flexibility the industry has in adjusting to economic developments.”
Looking at regional performance, Asia-Pacific airlines saw their air cargo volume decrease 10.7 percent in September 2022 compared to the same month in 2021. Available capacity in the region increased 2.8 percent compared to 2021.
“Airlines in the region continue to be impacted by the conflict in Ukraine, labor shortages, and lower levels of trade and manufacturing activity due to Omicron-related restrictions in China,” IATA said.
North American carriers posted a 6 percent decline in cargo volume in September year over year. Capacity was up 4.6 percent compared to September 2021.
European carriers saw a 15.6 percent decrease in cargo volume in the month from September 2021. IATA said this was attributable to the war in Ukraine, as well as labor shortages and high inflation levels, most notably in Turkey. Capacity increased 0.2 percent year over year.
Middle Eastern carriers experienced a 15.8 percent year-on-year decrease in cargo volume in September–the worst performance of all regions and a significant decline compared to the previous month. Stagnant cargo volumes to and from Europe impacted the region’s performance, IATA noted. Capacity was down 2.8 percent compared to September 2021.
Latin American carriers reported an increase of 10.8 percent in cargo volume for the month, the strongest performance of all regions.
“Airlines in this region have shown optimism by introducing new services and capacity, and in some cases investing in additional aircraft for air cargo in the coming months,” IATA said.
Capacity in September was up 18.4 percent compared to the same month in 2021.
African airlines saw cargo volume rise 0.1 percent in September from a year earlier. Capacity was 4.1 percent below September 2021.