Need for Speed Pumped up Air Cargo Demand 12% in April

Date: Thursday, June 10th, 2021
Source: Sourcing Journal

Global air cargo demand continued to outperform pre-COVID levels in April, with demand up 12 percent, the International Air Transport Association (IATA) said in its monthly report.

IATA said with monthly results between 2021 and 2020 distorted by the extraordinary impact of COVID-19, the report used comparisons with April 2019, which followed a normal demand pattern.

Capacity remains 9.7 percent below April 2019 due to the ongoing grounding of passenger aircraft, IATA noted. Airlines continue to use dedicated freighters to plug the lack of available belly capacity. International capacity from dedicated freighters rose 26.2 percent in April compared to the same month in 2019, while belly-cargo capacity dropped by 38.5 percent.

Underlying economic conditions and favorable supply chain dynamics remain supportive for air cargo. IATA said competitiveness against sea shipping has improved–while air cargo rates have stabilized since reaching a peak in April 2020, shipping container rates have remain relatively high in comparison. Drewry’s composite World Container index increased 3.3 percent, or $207, to $6,463.78 per 40-foot container for the week ended June 3 and was 310.1 percent higher than a year ago.

At the same time, longer supplier delivery times as economic activity ramps up make the speed of air cargo an advantage by recovering some of the time lost in the production process, IATA said.

“Air cargo continues to be the good news story for the air transport sector,” Willie Walsh, IATA’s director general, said. “Demand is up 12 percent on pre-crisis levels and yields are solid. Some regions are outperforming the global trend, most notably carriers in North America, the Middle East and Africa. Strong air cargo performance, however, is not universal. The recovery for carriers in the Latin American region, for example, is stalled.”

Asia-Pacific airlines saw demand for international air cargo increase 9.2 percent in April 2021 compared to the same month in 2019. This was a significant improvement in performance compared to the previous month. International capacity remained constrained in the region, down 18.7 percent versus April 2019.

North American carriers posted a 25.6 percent rise in demand in the month compared to April 2019.

“This strong performance reflects the appetite of U.S. consumers for products manufactured in Asia,” IATA said. “North American carriers have also been able to grow their market share, notably on routes between North and South America, owing to the large freighter fleets they have available. International capacity grew by 5.5 percent compared with April 2019.”

European carriers saw an 11.4 percent gain in demand in April compared to the same month in 2019, a significant improvement compared to the previous month. Improved operating conditions and recovering export orders contributed to the positive performance, IATA noted. International capacity decreased 17.5 percent in April 2021 from two year earlier.

Middle Eastern carriers posted a 15.3 percent rise in international cargo volumes in the month versus April 2019. IATA said seasonally adjusted volumes remain on a robust upward trend. International capacity was down 17.5 percent.

Latin American carriers reported a decline of 32.7 percent in international cargo volumes in April compared to the 2019 period. This was the worst performance of all regions and a decline in performance compared to the previous month.

“Drivers of air cargo demand in Latin America remain relatively less supportive than in the other regions and airlines in the region have lost market share to other carriers due to financial restructuring,” IATA said. “Despite this, volumes on several routes in the region, such as Europe and Central America, and North and South America, performed well.”

International capacity in the region decreased 52.5 percent compared with April 2019.

African airlines’ cargo demand in April increased 30.6 percent compared to the same month in 2019, the strongest of all regions and the fourth consecutive month of growth at or above 25 percent compared to 2019. Robust expansion on the Asia-Africa trade lanes contributed to the strong growth, IATA said.


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