• Sunday, February 25, 2024
businessday logo


Cargo demand rises in October on recovery

Global air cargo demand strengthens despite challenges in July

The International Air Transport Association (IATA) released data for October 2023 global air cargo markets indicating the third consecutive month of stronger year-on-year demand.

The increase in cargo demand has been linked to recovering demand and stronger yields globally.

“Demand for air cargo was up 3.8 percent 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. Recovering demand, slightly stronger yields and the uptick in trade are all good news.

“But with demand still 2.4 percent 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,” said Willie Walsh, IATA’s Director General.

Global demand, measured in cargo tonne-kilometres (CTKs*), increased by 3.8 percent compared to October 2022. For international operations, the demand lagged slightly at 3.5%.

Capacity, measured in available cargo tonne-kilometres (ACTKs), was up 13.1% compared to October 2022 (11.1% for international operations). This was largely related to the growth in belly capacity. International belly capacity, for example, rose 30.5% year-on-year on the strength of passenger markets.

Read also: United Nigeria Airlines blames diversion of Abuja-bound flight to Asaba on bad weather

Several factors in the operating environment should be noted:

• Economic activities slowed in October. With the Purchasing Managers’ Index for manufacturing output and export orders for major economies (excluding the US) remaining below the critical 50 mark, there is a clear marker for economic challenges ahead.

• Inflation in major advanced economies continued to ease from its peak in terms of Consumer Price Index (CPI), reaching between three percent and four percent for the US and for the EU respectively, in October. China’s CPI, however, indicated deflation for the second time this year, raising concerns of an economic slowdown.

• Global trade reversed its downward trajectory and stabilized in September. Although below its 2022 peak, global cross-border trade is more than five percent above pre-pandemic levels.

• After a continuous 17-month decline, cargo yields ticked-up in September and continued into October with a 2.6 percent month-on-month gain, remaining well-above pre-pandemic levels.

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

Asia-Pacific airlines saw their air cargo volumes increase by 7.6 percent in October 2023 compared to the same month in 2022. This performance was close to par with the previous month (+7.7 percent).

European carriers saw their air cargo volumes increase by 1.0 percent in October compared to the same month in 2022. This was a stronger performance than in September (-1.5 percent).

Middle Eastern carriers had the strongest performance in October 2023, with a 10.9 percent year-on-year increase in cargo volumes.