African air cargo demand surges amid global downturn
12 November 2020 |
4:09 am
Air cargo demand and movement have recorded a surge in the African region, though global demand still remains weak on account of the COVID-19 aviation disruptions.
Air cargo demand and movement have recorded a surge in the African region, though global demand still remains weak on account of the COVID-19 aviation disruptions.
The International Air Transport Association (IATA) in the September data for global air freight markets showed that air cargo demand, while strengthening, remains depressed compared to 2019 levels.
According to the data, African airlines saw demand increase by 9.7 per cent year-on-year in September. This was the fifth consecutive month in which the region posted the strongest increase in international demand. Investment flows along the Africa-Asia route continue to drive the regional outcomes. International capacity decreased by 24.9 per cent.
However, global demand, measured in cargo tonne-kilometres (CTKs), was eight per cent below previous-year levels in September, -9.9 per cent for international operations. That is an improvement from the 12.1 per cent year-on-year drop recorded in August. Month-on-month demand grew by 3.7 per cent in September.
Global capacity shrank by 25.2 per cent in September, -28 per cent for international operations, compared to the previous year. That is nearly three times larger than the contraction in demand, indicating a severe lack of capacity in the market.
Strong regional variations are emerging with North American and African carriers reporting year-on-year gains in demand, +1.5 per cent and +9.7 per cent respectively, while all other regions remained in negative territory compared to a year earlier.
Improving performance is aligned with improvements in key economic indicators. The new export orders component of the manufacturing Purchasing Managers’ Index rose above the 50-mark, indicating growth, for the first time since mid-2018. The World Trade Organisation revised their 2020 trade growth forecast from -12.9 per cent to -9.2 per cent.
IATA’s Director-General and Chief Executive Officer (CEO), Alexandre de Juniac, noted that air cargo volumes were down in 2020, but they are a world apart from the extreme difficulties in the passenger business.
“For air cargo, 92 per cent of the business is still there, whereas about 90 per cent of international passenger traffic has disappeared. Favorable indicators for the peak year-end season will support the continued recovery in demand.”
“Already North American and African carriers are reporting demand gains in 2020. The challenge continues to be on capacity. As carriers adjust schedules to reflect falling passenger demand amid the resurgence of COVID-19, valuable belly capacity will be lost when it is needed the most,” de Juniac said.
Asia-Pacific airlines saw demand for international air cargo fall 14.6 per cent in September 2020 compared to the same month a year earlier. This was an improvement from the 16.4 per cent fall in August 2020. Demand on routes between Asia–North America and Asia–Africa were strongest. International capacity remained constrained in the region, down 32 per cent, despite airlines adding more capacity on many routes.
North American carriers returned to pre-crisis levels, posting a 1.5 per cent increase in international demand compared to the previous year—the first month of growth in 10 months. This strong performance was driven by the Asia-North America routes, reflecting e-commerce demand for products manufactured in Asia. The region’s domestic market also performed robustly. International capacity decreased by 19.7 per cent.
European carriers reported a decrease in demand of 15.7 per cent compared to the previous year. Improvements have been slight but consistent amid recovering economic activity and increasing exports, however, all major routes remained in contractionary territory. International capacity decreased 32.8 per cent.
Related
6 hours ago
The Lagos Chamber of Commerce and Industry (LCCI) is deeply worried about the various economic headwinds confronting the stability of the Nigerian economy.
6 hours ago
Worried by the dwindling oil production and the need to drive investments in the nation’s oil and gas sector, the Federal Government, through the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has underscored the imperative of ramping up production as a pivotal strategy to ensure stability in the midstream and downstream sectors of the industry.
6 hours ago
The Nigerian Ports Authority (NPA) is awaiting the Debt Management Office's (DMO) final review and approval of Citibank's $700 million loan mandate, which will fund the rehabilitation of the Apapa and Tin-Can Island ports in Lagos.
1 day ago
A foreign investor at TLG Capitals, Isaac Marshall, has attributed the naira gain to the decision of the Central Bank of Nigeria (CBN) to clear the FX backlog. Nigeria's foreign exchange (FX) reserves have fallen to a six-year low, Marshall said in a statement on his LinkedIn account on Thursday. He stated that this decline…
1 day ago
Stakeholders in the insurance and pension industry have called on operators in the sectors to adopt artificial intelligence (AI) to drive business expansion in the country.
1 day ago
Though it does not have the power to regulate prices, the Federal Competition and Consumer Protection Commission (FCCPC) will deploy an existing legal framework to enforce fair competition and consumer protection provisions to achieve fair prices of commodities.
1 day ago
Inflation in Nigeria is reaching its peak now and will decelerate toward the middle of the year, Director-General of the Budget Office of the Federation, Ben Akabueze, has said.
1 day ago
Nigerian Breweries (NB) Plc has disclosed that the proposed N600 billion recapitalisation scheme by way of rights issue would settle N153 billion outstanding foreign exchange (FX) losses and part of its local bank debt facility.
1 day ago
The International Renewable Energy Agency (IRENA) is seeking a new approach to energy security amidst geopolitical concerns and a push from fossil fuels.
1 day ago
The Chartered Institute of Bankers of Nigeria (CIBN) 2024 yearly lecture, slated to take place on April 23, at the Civic Center, Victoria Island, Lagos, has its theme as "Improving Availability of Credit in the Nigerian Real Economy: The Critical Importance of Liquidity."
×
Get the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.
0 Comments
We will review and take appropriate action.