Air Cargo Capacity Passes Pre-COVID Levels in April

This article was originally published via https://www.thedcn.com.au/.

GLOBAL air cargo capacity has surpassed pre-Covid levels for the first time in three years, data from the International Air Transport Association shows.

The latest monthly data from IATA, covering April this year, suggests the decline in global air cargo demand has slowed.

Global demand, measured in cargo tonne-kilometres, fell 6.6% compared with demand in April 2022.

IATA said the decline is ongoing, but it was slower in April, and an improvement over the previous month’s performance (-7.6%).

Capacity, measured in available cargo tonne-kilometres, was up 13.4% compared with April 2022. It was also up 3.2% compared with capacity recorded in April 2019.

IATA said the “strong uptick” was driven by belly capacity as demand in the passenger business recovers. Adjusting for this, freighter capacity declined 2.3%.

Preighter operations (passenger aircraft operating temporarily as cargo aircraft) ceased in March after 2.5 years of continuous activity.

“The air cargo industry is adjusting itself to the implications of the recovery in passenger demand that brings with it an expansion of belly capacity,” IATA director general Willie Walsh said.

“Preighter operations stopped in March and freighter services were scaled back by 2.3% in April.”

Mr Walsh said the demand environment in April was “challenging to read”.

“Tapering inflation is definitely a positive, but the degree and speed at which that could lead to looser monetary policies that might stimulate demand is unclear.

“The resilience that got the air cargo industry through the Covid-19 crisis is also critical in the aftermath.”

Asia-Pacific airlines saw their air cargo volumes decrease by 0.4% in April 2023 compared with the same month in 2022.

IATA said this was a significant improvement in performance compared to March (-6.8%). Available capacity in the region increased by 41.2% compared to April 2022 as more and more belly capacity came online from the passenger side of the business.

North American carriers saw the weakest performance of all regions with a 13.1% decrease in cargo volumes in April 2023 compared with the same month in 2022. This was a drop in performance compared to March (-10.2%).

IATA noted airlines in the region saw a significant decrease in international demand in April due to a substantial fall in volumes on two major trade lanes: North America-Europe (-13.5%) and North America-Asia (-9.3%). Capacity decreased 1.5% compared to April 2022.

European carriers experienced an 8.2% decrease in cargo volumes in April 2023 compared with the same month in 2022.

This was a slight decline in performance compared to March (-7.4%). Airlines in the region saw a significant decrease in international demand due to double-digit contractions on the North America-Europe (-13.5%) trade lane, as well as within Europe (-16.1%).

IATA said this was partially offset by strong demand on the Europe-Asia route (3.4%), which helped mitigate the overall decline in the region. Capacity increased 7.8% in April 2023 compared with April 2022.

In the Middle East, carriers experienced a 6.8% year-on-year decrease in cargo volumes in April 2023. This was a slight decline in performance compared with the previous month (-5.5%). Capacity increased 10.0% compared with April 2022.

Latin American carriers reported a 1.6% decrease in cargo volumes in April 2023 compared with April 2022. This was an improvement in performance compared to March (-4.4%). Capacity in April was up 8.1% compared with the same month in 2022.

And African airlines had the only positive performance in April posting a 0.9% increase in demand compared with April 2022.

IATA said this was an improvement in performance compared to the previous month (-4.3%). It noted the Africa to Asia trade route experienced a significant increase in cargo demand in April, up 20.0% year-on-year. Capacity was 5.3% above April 2022 levels.