The latest air cargo markets data for June 2023 from the International Air Transport Association (IATA) shows the smallest year-over-year contraction in demand since February 2022.
According to IATA, global demand, measured in cargo tonne-kilometres (CTKs), fell 3.4% in June compared to June 2022 (-3.7% for international operations). For the half-year, demand slid 8.1%, compared to the January to June period of 2022 (-8.7% for international operations). However, demand in June was only 2.4% below June 2019 levels (pre-pandemic). Moreover, African airlines posted a 2.8% decrease in demand compared to June 2022. This was a decline in performance, compared to the previous month (-1.9%). Capacity on the continent in June was down 3.7%, compared to the same month in 2022. For the first half of the year, African cargo demand slowed by 4.4% while capacity climbed 1.6%.
Meanwhile, global capacity, as measured by available cargo tonne-kilometres (ACTKs), rose 9.7% compared to June 2022, which was a slower rate compared to the double-digit growth recorded between March and May. This, IATA noted, reflects strategic capacity adjustments airlines are making amid a weakened demand environment. Capacity for the first half of 2023 was up 9.9% compared to a year ago. Capacity is now 3.7% above June 2019 (pre-pandemic) levels.
Key factors influencing air cargo demand included global cross-border trade, which decreased by 2.4% year-over-year in May, reflecting the cooling demand environment and challenging macroeconomic conditions.
“The difference between the annual growth rates of air cargo and the global goods trade narrowed to -2.6 percentage points in May, representing the smallest gap since January 2022. However, the gap still suggests that air cargo continues to suffer more than container cargo from the slowdown in global trade,” IATA stated. In June, both the manufacturing output Purchasing Managers Index or PMI (49.2) and new export orders PMI (47.1) were below the critical threshold represented by the 50 mark, indicating a decline in global manufacturing production and exports.
“We remain hopeful that the difficult trading conditions for air cargo will moderate as inflation eases in major economies. This, in turn, could encourage the central banks to loosen the money supply, which could stimulate greater economic activity,” said Willie Walsh, IATA’s Director General.