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Global air cargo improves in February

Air cargo demand surges 11.9% on rising trade, manufacturing output

The International Air Transport Association (IATA) released data for February 2023 on global air cargo markets showing that air cargo demand rose above pre-pandemic levels.

Global demand, measured in cargo tonne-kilometres (CTKs*), fell 7.5 per cent compared to February 2022 (-8.2 per cent for international operations).

This was half the rate of annual decline seen in the previous two months (-14.9 per cent and -15.3 per cent respectively). February demand for air cargo was 2.9 per cent higher than pre-pandemic levels (February 2019)—the first time it has surpassed pre-pandemic levels in eight months.

Capacity (measured in available cargo tonne-kilometres, ACTK) was up 8.6 per cent compared to February 2022. The strong uptick in ACTKs reflects the addition of belly capacity as the passenger side of the business continues to recover.

International belly capacity grew by 57.0 per cent in February year-over-year, reaching 75.1 per cent of the 2019 (pre-pandemic) capacity.

The global new export orders component of the manufacturing PMI, a leading indicator of cargo demand, continued to increase in February. China’s PMI level surpassed the critical 50-mark indicating that demand for manufactured goods from the world’s largest export economy is growing.

Global goods trade decreased by 1.5 per cent in January; this was a slower rate of decline than the previous month of -3.3 per cent.

The Consumer Price Index for G7 countries decreased from 6.7 per cent in January to 6.4 per cent in February. Inflation in producer (input) prices reduced by 2.2 percentage points to 9.6 per cent in December (last available data).

“The story of air cargo in February is one of slowing declines. Year-on-year demand fell by 7.5 per cent. That’s half the rate of decline experienced in January. This shifting of gears was sufficient to boost the overall industry into positive territory (+2.9 per cent) compared to pre-pandemic levels.

An optimistic eye could see the start of an improvement trend that leads to market stabilization and a return to more normal demand patterns after dramatic ups and downs in recent years,” Willie Walsh, IATA’s Director General said.

African airlines saw cargo volumes decrease by 3.4 per cent in February 2023 compared to February 2022. This was an improvement in performance compared to the previous month (-9.5 per cent). Notably, Africa to Asia route area experienced significant cargo demand growth in February, up 39.5 per cent year-on-year. Capacity was 4.7 per cent above February 2022 levels.

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Asia-Pacific airlines saw their air cargo volumes decrease by 6.0 per cent in February 2023 compared to the same month in 2022.

This was a significant improvement in performance compared to January (-19.0 per cent). Airlines in the region benefited from China’s reopening, which saw restrictions lifted and economic activities resumed. Available capacity in the region increased by 19.9 per cent compared to February 2022 as more and more belly capacity came online from the passenger side of the business.

North American carriers posted a 3.2 per cent decrease in cargo volumes in February 2023 compared to the same month in 2022. This was a solid improvement in performance compared to January (-8.7 per cent).

Notably, the region saw a significant increase in international demand in February which boosted its market share in international cargo traffic beyond pre-pandemic levels (21.7 per cent in Feb 2023 versus 18.2 per cent in Feb 2019). Capacity increased by 2.8 per cent compared to February 2022.

European carriers saw the weakest performance of all regions with a 15.3 per cent decrease in cargo volumes in February 2023 compared to the same month in 2022. This was an improvement in performance compared to January (-20.4 per cent).

Airlines in the region continue to be most affected by the war in Ukraine. Capacity decreased by 1.5 per cent in February 2023 compared to February 2022.

Middle Eastern carriers experienced an 8.1 per cent year-on-year decrease in cargo volumes in February 2023. This was a slight improvement from the previous month (-11.8 per cent). Capacity increased by 9.3 per cent compared to February 2022.

Latin American carriers reported a 2.7 per cent decrease in cargo volumes in February 2023 compared to February 2022. This was a drop in performance compared to January which saw a 4.6 per cent increase. Capacity in February was up 27.6 per cent compared to the same month in 2022.