Global air cargo demand improving slower than expected, according to new IATA data
Though global air cargo demand continues to increase, new IATA data has shown that it is at a much slower pace than originally expected.
The International Air Transport Association (IATA) has released global air freight markets data for October 2020, showing that air cargo demand continued to improve, but at a slower pace than September 2020, and continues to remain below previous year levels.
Global demand, measured in cargo tonne-kilometres (CTKs), was 6.2 per cent below previous-year levels in October 2020 (7.5 per cent for international operations). That is an improvement from the 7.8 per cent year-on-year drop recorded in September 2020. However, the pace of recovery in October 2020 was slower than in September 2020, with month-on-month demand growing 4.1 per cent (1.1 per cent for international).
Global capacity, measured in available cargo tonne-kilometres (ACTKs), shrank by 22.6 per cent in October 2020 (24.8 per cent for international operations) compared to 2019. That is nearly four times larger than the contraction in demand, indicating the continuing and severe capacity crunch.
Strong regional variations continue with North American and African carriers reporting year-on-year gains in demand (6.2 per cent and 2.2 per cent, respectively), while all other regions remained in negative territory compared to a year earlier.
Improving performance is aligned with improvements in key economic indicators:
- The new export orders component of the manufacturing Purchasing Managers’ Index (PMI) stayed above the 50-mark for the second month in a row. Results above 50 indicate economic growth. This a significant development, as the PMI had been in negative growth territory from mid-2018 through to August 2020
- Global goods trade continued to trend upwards in recent months, according to the World Trade Organization (WTO). The uptick will not be sufficient to avoid a full-year decline of 9.2 per cent compared to 2019. Much of this ground, however, will be regained in 2021, with an expectation of 7.2 per cent annual growth
- The Global Composite PMI – which reflects changes in global output, employment, new business, backlogs and prices – indicates that economic recovery will continue in Q4/2020 despite a resurgence of the COVID-19 virus in many markets.
IATA‘s Director General and CEO, Alexandre de Juniac, said: “Demand for air cargo is coming back – a trend we see continuing into the fourth quarter. The biggest problem for air cargo is the lack of capacity, as much of the passenger fleet remains grounded. The end of the year is always peak season for air cargo. That will likely be exaggerated with shoppers relying on e-commerce – 80 per cent of which is delivered by air. So, the capacity crunch from the grounded aircraft will hit particularly hard in the closing months of 2020. The situation will become even more critical as we search for capacity for the impending vaccine deliveries.”