Global Air cargo demand stays weak in May

The International Air Transport Association (IATA) released data for May 2023 global air cargo markets showing weak market conditions.

Global demand, measured in cargo tonne-kilometers (CTKs), fell 5.2 percent compared to May 2022 (-6.0 percent for international operations).

Capacity, as measured by available cargo tonne-kilometers (ACTKs), rose 14.5 percent compared to May 2022, primarily driven by belly capacity which increases as demand in the passenger business recovers. Capacity is now 5.9 percent above May 2019 (pre-pandemic) levels.

Key factors influencing demand include:

The global manufacturing Purchasing Managers Index (PMI) indicates an annual contraction of 1.4 percent in new export orders and a decrease of 5.2 percent year-on-year in production PMI. This suggests a cooling in global manufacturing demand.

Global goods trade decreased by 0.8 percent in April, due to macroeconomic challenges and supply chain constraints. Trading conditions appeared to favor maritime cargo as demand for container shipping contracted by 0.2 percent while air cargo demand weakened by 6.3 percent year-on-year.

The global supplier delivery time PMI increased to 54.5 in May, up from its low of 35 in October 2021, indicating shorter delivery times and some relief for supply chains. However, this is also a sign of weaker global goods trade demand.

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“Trading conditions for air cargo continue to be challenging with a 5.2 percent fall in demand and several economic indicators pointing towards weakness. The second half of the year, however, should bring some improvements. As inflation moderates in many markets, it is widely expected that central bank rate hikes will taper. This should help stimulate economic activity with a positive impact on demand for air cargo,” Willie Walsh, IATA’s Director General said.

African airlines posted a 2.4 percent decrease in demand compared to May 2022. This was a decline in performance compared to the previous month (-0.9 percent).

Notably, the growth on the Africa to Asia trade route slowed significantly in May from 18.5 percent in April to 11.0 percent, possibly due to the impact of the conflict in Sudan since mid-April. Capacity in May was up 9.2 percent compared to the same month in 2022.

European carriers experienced a 6.7 percent decrease in cargo volumes in May 2023, compared to the same month in 2022. This was an improvement in performance compared to April (-7.7 percent), in part due to the smaller annual contraction in international CTKs on the Europe-Middle East trade lane, from -4.7 percent in April to -2.9 percent in May.

The decline in international cargo traffic on markets within-Europe also improved from -16.2 percent in April to -7.8 percent this month (seasonally adjusted). Meanwhile, capacity increased 5.6 percent in May 2023 compared to May 2022.

Middle Eastern carriers experienced a 3.1 percent year-on-year decrease in cargo volumes in May 2023. This was a slight improvement in performance compared to the previous month (-6.7 percent). Capacity increased 15.6 percent compared to May 2022.

Latin American carriers had the only positive performance in May 2023 posting a 3.6 percent increase in cargo volumes compared to May 2022. This was an improvement in performance compared to April (-1.6 percent). Capacity in May was up 14.7 percent compared to the same month in 2022.