The International Air Transport Association’s (IATA) has released its latest analysis of Supply, Demand and Performance of the global and regional air cargo markets, based on the data collected during July 2020. The data indicates that the global air cargo demand is stable but at lower levels than the year 2019.
According to the recent IATA analysis, there is some month-to-month improvement, but it is at a slower pace than some of the traditional leading indicators would suggest; this is mainly due to the capacity constraint from the loss of available belly cargo space as passenger aircraft remain parked, says reports.
• Global demand, measured in cargo tonne-kilometers (CTKs), fell by 13.5 per cent in July (-15.5 per cent for international operations) compared to the previous year. That is a modest improvement from the 16.6 per cent year-on-year drop recorded in June. Seasonally-adjusted demand grew by 2.6 per cent month-on-month in July.
• Global capacity, measured in available cargo tonne-kilometers (ACTKs), shrank by 31.2 per cent in July ( 32.9 per cent for international operations) compared to the previous year. This is a small improvement from the 33.4 per cent year-on-year drop in June.
• Belly capacity for international air cargo shrank by 70.5 per cent in July compared to the previous year owing to the withdrawal of passenger services amid the Covid-19 pandemic. This was partially offset by a 28.8 per cent increase in capacity through expanded use of freighter aircraft.
• Economic activity continued to recover in July reflected in the performance of the Purchasing Managers’ Index (PMI), an indicator of economic health in the manufacturing sector which comprises the new export orders component of the manufacturing PMI, which rose by 3.5 points compared to June, and up by 19.8 points since April. The PMI tracking global manufacturing output returned to above 50, consistent with month-on-month growth in output
Alexandre de Juniac, Director General and CEO, IATA said, “Economic indicators are improving, but we have not yet seen that fully reflected in growing air cargo shipments. That said, air cargo is much stronger than the passenger side of the business. And one of our biggest challenges remains accommodating demand with severely reduced capacity. If borders remain closed, travel curtailed and passenger fleets grounded, the ability of air cargo to keep the global economy moving will be challenged.”
Asia-Pacific airlines saw demand for international air cargo fall by 15.3 per cent in July 2020 compared to the same period a year earlier. After a robust initial recovery in May, month-on-month growth seasonally-adjusted demand has softened. International capacity decreased 32.0 per cent.
North American carriers reported a single digit fall in international cargo demand of 5.4 per cent year-on-year in July. The stronger performance is due in part to strong demand on the transpacific, Asia-North America route, reflecting e-commerce demand for products manufactured in Asia. International capacity decreased 30.9 per cent.
European carriers reported a 22.4 per cent annual drop in international cargo volumes in July. This was a slight improvement from June’s performance of -27.6 per cent. Demand on most key trade lanes to / from the region remained weak. The large Europe–Asia market was down 20 per cent year-on-year in July. International capacity decreased 37.4%.
Middle Eastern carriers reported a decline of 14.9 per cent in year-on-year international cargo volumes in July, an improvement from the 19 per cent fall in June. Seasonally-adjusted demand grew 7.2 per cent month-on-month in July–the strongest of all regions. This recovery was driven by the aggressive operational strategies of some of the region’s carriers. International capacity decreased 27.1 per cent, the most resilient of all regions.
Latin American carriers posted a 32.1 per cent drop in year-on-year international demand in July, down from a 28.6 per cent decline in June. International capacity decreased 44.5 per cent. The drop in both demand and capacity was the most severe of all regions.
The COVID-19 crisis is particularly challenging at present for airlines based in Latin America owing to strict lockdown measures. In July the Latin American air cargo market was smaller than the African market for the first time since these statistics have been reported in 1990.
African airlines posted a contraction of 3.0 per cent in July. This was down from a 3.8 per cent increase in demand in June. The small Africa-Asia market continued to support the region’s performance. International capacity decreased 33.7 per cent.