Air cargo demand up 3.8% in Oct

• Global demand for air cargo increased by 3.8% year-on-year in October, according to the International Air Transport Association

• This is the third consecutive month of growth in demand

• Capacity was up 13.1% compared to Oct 2022

• Key factors affecting the operating environment included slowed economic activities, easing inflation in major economies, stabilized global trade, and an uptick in cargo yields

Global air cargo demand grew 3.8% year-on-year in October, the third consecutive month of growth, according to the International Air Transport Association (IATA).

Demand is measured in cargo tonne-kilometers (CTKs). International operations, however, experienced a slightly lower demand increase at 3.5%.

In terms of capacity, available cargo tonne-kilometers (ACTKs) saw an uptick of 13.1% compared to October 2022 (11.1% for international operations). IATA attributed the increase to growth in belly capacity.

International belly capacity surged 30.5% year-on-year, fueled by strength in passenger markets.

READ: Air cargo demand up 1.9% in Sept

IATA highlighted key factors in the operating environment for October:

• Economic activities, marked by a Purchasing Managers’ Index for manufacturing output and export orders remaining below the critical 50 mark for major economies (excluding the US).
• Inflation in major advanced economies eased, with the Consumer Price Index (CPI) for the US and the EU reaching between 3% and 4% in October. However, China’s CPI indicated deflation for the second time this year, raising concerns of an economic slowdown.
• Global trade stabilized in September, showing an increase of over 5% above pre-pandemic levels, although below its 2022 peak.
• After a continuous 17-month decline, cargo yields saw a 2.6% month-on-month gain in September, remaining well above pre-pandemic levels.

“Demand for air cargo was up 3.8% in October. That marks three consecutive months of year-on-year growth, placing air cargo on course to end 2023 on a much stronger footing than it began the year,” said Willie Walsh, IATA’s director general.

“Recovering demand, slightly stronger yields and the uptick in trade are all good news. But with demand still 2.4% below pre-pandemic levels, and much uncertainty remaining over the trajectory of the global economy, optimism must be balanced with caution. Nonetheless, a continued strong peak year-end season will certainly help the sector to manage through whatever turns the global economy might take in 2024,” Walsh added.

Regional performance

Asia-Pacific airlines saw their air cargo volumes increase by 7.6% in October 2023 compared to the same month in 2022 and was close to par with the previous month (+7.7%), benefiting from ongoing growth in international CTKs on major trade lanes such as Africa-Asia (+16.7%), Middle East-Asia (+10.3%), and Europe-Asia (+8.5%).

Available capacity for the region’s airlines increased by 30.0% compared to October 2022 as more belly capacity came online from the passenger side of the business.

In October, North American carriers experienced a 1.8% year-on-year decrease in cargo volumes, showing a slight performance improvement from September’s -2.2%.

Despite the North America-Asia trade lane recording an increase in international CTKs from -1.8% in September to -0.9% in October and the North America-Europe market slightly improving in international CTKs from -2.7% to -2.1%, carriers in the region did not see significant benefits.

The overall capacity increased by 2.4% compared to October 2022, highlighting a modest growth in operational capabilities.

European carriers saw their air cargo volumes increase by 1.0% in October compared to the same month in 2022, a better performance than in September (-1.5%).

Carriers in the region benefited from the first growth in international CTKs in the within Europe market since January 2022 (-4.2% in September vs +3.4% in October).

Gains made from the expansion in the Middle East-Europe trade lane (+17.1% in October) also benefited carriers in the region. Capacity increased 7.0% in October 2023 compared to 2022.

Middle Eastern carriers had the strongest performance in October 2023, with a 10.9% year-on-year increase in cargo volumes. This was a significant improvement from the previous month’s performance (+2.5%).

Carriers in the region benefited from growth in the Middle East-Asia (+10.3%) and Middle East–Europe markets (+17.1%). Capacity increased 15% compared to October 2022.

In Latin America, carriers experienced a 4.0% increase in cargo volumes compared to October 2022, a notable increase compared to the previous month’s gain (+2.3%). Capacity in October was up 8.3% compared to the same month in 2022.

African airlines saw their air cargo volumes increase by 2.9% in October 2023, much improved compared to September’s performance (-0.1%). Carriers in the region benefited from the strongest annual growth since May (+16.7%). Capacity was 9.8% above October 2022 levels.