The International Air Transport Association (IATA) has released data for global air freight markets showing that air cargo demand rebounded in 2023 with a particularly strong fourth-quarter performance despite economic uncertainties.

Full-year demand reached a level just slightly below 2022 and 2019. Global full-year demand in 2023, measured in cargo tonne-kilometers (CTKs), was down 1.9 per cent compared to 2022 (-2.2 per cent for international operations). Compared to 2019, it was down 3.6 per cent (-3.8 for international operations).

Capacity in 2023, measured in available cargo tonne-kilometers (ACTKs), was 11.3 per cent above 2022 (+9.6 per cent for international operations). Compared to 2019 (pre-COVID) levels, capacity was up 2.5 per cent (0.0 per cent for international operations).

December 2023 saw an exceptionally strong performance: global demand was 10.8 per cent above 2022 levels (+11.5 per cent for international operations). This was the strongest annual growth performance over the past two years. Global capacity was 13.6 per cent above 2022 levels (+14.1 per cent for international operations).

Some indicators to note include: global cross-border trade recorded growth for the third consecutive month in October, reversing its previous downward trend.

December inflation in both the United States and the EU as measured by the corresponding Consumer Price Indices (CPI) stayed below 3.5 per cent year-on-year. China’s CPI, however, indicated deflation for the third consecutive month, raising concerns of an economic slowdown.

Both the manufacturing output and new export order Purchasing Managers Indexes (PMIs) – two leading indicators of global air cargo demand—continued to hover below the 50-mark in December, usual markers for contraction.

IATA’s Director General, Willie Walsh, said 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 per cent, the significant strengthening in the last quarter is a sign that markets are stabilising 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,” Walsh said.

In the regional performance section, African airlines reported a decrease in demand of 1.8 per cent (-2.0 per cent for international demand) in 2023 compared to 2022 and an increase in capacity of 5.6 per cent (+5.0 per cent for international operations).

In December airlines in the region posted the weakest performance of all with a 1.2 per cent decrease in demand (-1.4 per cent for international operations) compared to 2021. Capacity grew 7.4 per cent (+6.8 per cent for international operations) during the same period.

Asia-Pacific Airlines posted a 0.9 per cent increase in demand in 2023 compared to 2022 (-1.4 per cent for international operations) and a capacity increase of 28.5 per cent (+16.6 per cent for international operations).

In December, airlines in the region recorded the best performance of all regions, posting an 18.5 per cent increase in demand (+15.4 per cent for international operations) compared to 2022. Capacity increased 31.1 per cent (+22.9 per cent for international operations) during the same period. Walsh noted that the recent disruption to maritime routes in the Red Sea has seen some shippers pivot to air cargo.

“The increased demand saw a spike in air cargo yields on related trade lanes. A similar spike is expected in January as disruptions intensified. While not all cargo is suitable for air transport, it is a vital option for some of the most urgent shipments in extraordinary circumstances. And that is critical to the continuity of the global economy,” Walsh said.