Global air cargo half-year growth strongest since 2017
Economic conditions globally and favourable supply chain dynamics are strongly weighted in favour of air cargo, which is proving a lifeline for many airlines as they struggle with passenger travel restrictions.
This pushed first half-year air cargo growth to eight per cent, notably its strongest first half performance since 2017 (when the industry posted 10.2 per cent year-on-year growth).
Significantly, we have seen this growth varying greatly between different regions, with North America driving the biggest growth. North American carriers contributed 5.9 percentage points (ppts) to the 9.9 per cent June total. Middle East carriers contributed 2.1 ppts, European airlines 1.6 ppts, African airlines 0.5 ppts and Asia-Pacific carriers 0.3 ppts, while Latin American carriers did not support the growth, shaving 0.5 ppts off the total.
Overall capacity, measured in available cargo tonne-kilometres (ACTKs), remained constrained at 10.8 per cent below pre-COVID-19 levels (June 2019) due to the ongoing grounding of passenger aircraft. Belly capacity was down 38.9 per cent on June 2019 levels, partially offset by a 29.7 per cent increase in dedicated freighter capacity.
“With first-half demand eight per cent above pre-crisis levels, air cargo is a revenue lifeline for many airlines as they struggle with border closures that continue to devastate the international passenger business. Importantly, the strong first-half performance looks set to continue.”
Economic conditions globally and favourable supply chain dynamics are strongly weighted in favour of air cargo. The Purchasing Managers Indices (PMIs) show that business confidence, manufacturing output and new export orders are growing at a rapid pace in most economies. Coupled with a record low US inventory to sales ratio, and a considerable drop in the average price of air cargo in relation to container shipping, there is further growth potential for air cargo.