IATA: Air Cargo demand surge amid uncertainties

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Despite economic uncertainties, the air cargo demand has experienced a notable rebound in 2023, especially in the fourth quarter, according to the monthly report by the International Air Transport Association (IATA).

As per IATA’s monthly report, the full-year demand, measured in cargo tonne-kilometers (CTKs), was only slightly below the levels of both 2022 and 2019. In 2023, global demand showed a decrease of 1.9% compared to 2022 (-2.2% for international operations) and a 3.6% decline compared to 2019 (-3.8% for international operations).

The report highlighted that capacity, measured in available cargo tonne-kilometers (ACTKs), and increased by 11.3% in 2023 compared to 2022 (+ 9.6% for international operations). In comparison to the pre-COVID levels of 2019, capacity grew by 2.5% (0.0% for international operations). Notably, December 2023 exhibited a robust performance with global demand soaring 10.8% above 2022 levels (+11.5% for international operations). This marked the strongest annual growth in the past two years, accompanied by a 13.6% increase in global capacity compared to 2022 levels (+14.1% for international operations).

Key indicators included a positive trend in global cross-border trade, which recorded growth for the consecutive month in October, reversing its previous downward trajectory. Additionally, December inflation in the United States and the EU, as measured by the corresponding Consumer Price Indices (CPI), remained below 3.5% year-on-year. On the other hand, China’s CPI indicated deflation for the third consecutive month, raising concerns about an economic slowdown. The report noted that both the manufacturing output and new export order Purchasing Managers Indexes (PMIs), serving as leading indicators of global air cargo demand, continued to hover below the 50-mark in December, typically indicating contraction.

“Despite political and economic challenges, 2023 saw air cargo markets regain ground lost in 2022 after the extraordinary COVID peak in 2021. Although full year demand was shy of pre-Covid levels by 3.6%, the significant strengthening in the last quarter is a sign that markets are stabilizing towards more normal demand patterns. That puts the industry on very solid ground for success in 2024. But with continued, and in some cases intensifying, instability in geopolitics and economic forces, little should be taken for granted in the months ahead,”

Willie Walsh, IATA’s Director General

When Asia-Pacific airlines posted a 0.9% increase in demand in 2023 compared to 2022 (-1.4% for international operations) and a capacity increase of 28.5% (+16.6% for international operations). In December, airlines in the region recorded the best performance of all regions, posting an 18.5% increase in demand (+15.4% for international operations) compared to 2022. Capacity increased 31.1% (+22.9% for international operations) during the same period.

In 2023, the European carriers posted a 3.9% decrease in demand as compared to 2022 (-4.1% for international operations). During the same period, airlines posted a capacity increase of 4.5% for both global and international operations.

In December, airlines in the region posted an 8.6% increase in demand (+8.7% for international operations) compared to 2022. Capacity increased 7.4% (+7.5% for international operations) during the same period. Airlines in the region continued to be most affected by the war in Ukraine. Middle Eastern carriers reported an increase in demand of 1.6% for global and international demand in 2023 compared to 2022 and an increase in capacity of 13.5% (+13.6% for international operations).

In December airlines in the region posted an 18.3% increase in demand for both global and international operations compared to 2022. Capacity increased 17.7% (+17.8% for international operations) during the same period.

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