Global aviation industry is witnessing increase in air cargo market. This is contained in a recent data released by International Air Transport Association (IATA). The growth was largely related to international belly capacity which rose 31.5 percent year-on-year as airlines scaled up operations to meet peak-northern summer travel season demand.
Global demand, measured in cargo tonne-kilometers (CTKs*), increased by 1.9 percent compared to September 2022 levels (+1.6 percent for international operations).
Capacity, measured in available cargo tonne-kilometers (ACTKs), was up 12.1 percent compared to September 2022 (+11.0 percent for international operations).
In September, both the manufacturing output Purchasing Managers Index or PMI (49.7) and new export orders PMI (47.7) saw a slight improvement to the previous month. They remained, however, below the critical 50-point threshold, indicating a continuing, but slightly slower, annual decline in global manufacturing production and exports.
Global cross-border trade contracted for the fifth month in a row in August, decreasing 3.8 percent year-over-year. This reflects the cooling global macroeconomic environment.
Annual growth in US consumer prices stabilized in September at 3.7 percent, the same rate as in August. In Europe and Japan consumer price inflation slowed by 1.0 and 0.2 percentage points, respectively, to 4.9 percent and 3.0 percent, (also respectively). In China, deflation-fighting policy measures saw an annual rise in consumer prices of 0.1 percent.
In September, the average price of jet fuel was USD 131.0 per barrel, marking a 43.1 percent increase from the May 2023 price. Recouping some of this added cost from surcharges in September contributed to the first increase in air cargo yields since November 2022.
“Air cargo eked out modest growth (1.9 percent) in September despite falling trade volumes and high jet fuel prices. That clearly shows the strength of air cargo’s value proposition. With the key export order and manufacturing PMIs hovering near positive territory, we can be cautiously optimistic for a strong year-end peak season,” said Willie Walsh, IATA’s Director General.
September regional performance
African airlines saw their air cargo volumes decline by 0.1 percent in September 2023, despite the strong growth of demand on the Africa-Asia trade lane (+12.8 percent). This was an improvement in performance compared to August (-3.5 percent). Capacity was 2.7 percent above September 2022 levels.
Asia-Pacific airlines saw their air cargo volumes increase by 7.7 percent in September 2023 compared to the same month in 2022. This was a significant improvement in performance compared to August (+4.6 percent). Carriers in the region benefited from growth on three major trade lanes: Europe-Asia (+9.6 percent), Middle East-Asia (+7.0 percent) and Africa-Asia (+12.8 percent). Available capacity for the region’s airlines increased by 30.5 percent compared to September 2022 as more belly capacity came online from the passenger side of the business (a year ago, the key Asian markets of Japan and China were still largely under severe COVID-19 travel restrictions).
North American carriers had the weakest performance in September, with a 2.2 percent decrease in cargo volumes. This was a decline in performance compared to August (-1.4 percent). Although contractions in the North America-Asia trade lane narrowed (from -4.3 percent in August to -1.8 percent in September) and the North America-Europe market stabilized its decline at (-2.5 percent) for the second month in a row. Carriers in the region did not benefit significantly. Capacity increased moderately by 0.2 percent compared to September 2022.
European carriers saw their air cargo volumes decline by 1.5 percent in September compared to the same month in 2022. This was a weaker performance than in August (-0.6 percent). Carriers in the region suffered from further contractions in the within Europe market (-5.7 percent in September vs -5.2 percent in August). Gains made from the expansion in the Middle East-Europe trade lane (+3.3 percent in September vs +0.5 percent in August) offset some declines from within Europe performance. Capacity increased 4.7 percent in September 2023 compared to 2022.
Middle Eastern carriers had the strongest performance in September 2023, with a 2.5 percent year-on-year increase in cargo volumes. This was an improvement from the previous month’s performance (+1.3 percent). Carriers in the region benefited from growth in the Middle East–Asia (+7.0 percent) and Middle East–Europe markets (+3.3 percent). Capacity increased 16.1 percent compared to September 2022.
Latin American carriers experienced a 2.3 percent increase in cargo volumes compared to September 2022. This was a significant decrease in performance compared to the previous month (+6.2 percent). Capacity in September was up 14.4 percent compared to the same month in 2022.