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Air cargo traffic records slow growth, rebound

By Wole Oyebade
09 December 2020   |   3:24 am
The International Air Transport Association (IATA) has released October data for global air freight markets showing that air cargo demand continues to improve but at a slower pace than the previous month and remains below previous year levels.

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The International Air Transport Association (IATA) has released October data for global air freight markets showing that air cargo demand continues to improve but at a slower pace than the previous month and remains below previous year levels.

Global demand, measured in cargo tonne-kilometers (CTKs), was 6.2 per cent below previous-year levels in October (-7.5 per cent for international operations). That is an improvement from the 7.8 per cent year-on-year drop recorded in September. However, the pace of recovery in October was slower than in September with month-on-month demand growing 4.1 per cent (1.1 per cent for international).

African airlines saw demand increase by 2.8 per cent year-on-year in October. This was lower than the 12.1 per cent growth in September. Despite this, the region still posted the strongest increase in international demand.

The slight weakening in performance can be attributed to a slowdown in the Asia-Africa market where demand decelerated by 19 percentage points year-on-year. International capacity decreased by 20.8 per cent.

Global capacity, measured in available cargo tonne-kilometers (ACTKs), shrank by 22.6 per cent in October ( 24.8 per cent for international operations) compared to the previous year. That is nearly four times larger than the contraction in demand, indicating the continuing and severe capacity crunch.

Strong regional variations continue with North American and African carriers reporting year-on-year gains in demand (+6.2 per cent and +2.2 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 (PMI) stayed above the 50-mark for the second month in a row. Results above 50 indicate economic growth.

Global goods trade continued to trend upwards in recent months, according to the World Trade Organisation. The uptick will not be sufficient to avoid a full-year decline of 9.2 per cent compared to 2019. Much of this ground, however, will be regained in 2021 with an expectation of 7.2 per cent annual growth;

The Global Composite PMI which reflects changes in global output, employment, new business, backlogs and prices, indicates that economic recovery will continue in Q4/2020 despite a resurgence of the COVID-19 virus in many markets.

IATA’s Director General and CEO, Alexandre de Juniac said demand for air cargo is coming back—a trend continuing into the fourth quarter.

“The biggest problem for air cargo is the lack of capacity as much of the passenger fleet remains grounded. The end of the year is always peak season for air cargo. That will likely be exaggerated with shoppers relying on e-commerce—80 per cent of which is delivered by air.

“So the capacity crunch from the grounded aircraft will hit particularly hard in the closing months of 2020. And the situation will become even more critical as we search for capacity for the impending vaccine deliveries,” de Juniac said.

Asia-Pacific airlines saw demand for international air cargo fall 11.6 per cent in October 2020 compared to the same month a year earlier. This was an improvement from the 14.6 per cent fall in September 2020 and the second consecutive month of improvement. International capacity remained constrained in the region, down 28.7 per cent. However, this was an improvement over 31.8 per cent fall in capacity the previous month. The region’s airlines reported the highest international load factor indicating a solid appetite for air cargo services.