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African airlines record 34.6% surge in air cargo demand

By Guardian Nigeria
05 November 2021   |   1:44 am
African airlines have recorded a 34.6 per cent surge in air cargo amid a marginal improvement in demand, globally. The International Air Transport Association ..

FILE PHOTO: The International Air Transport Association (IATA) logo is seen at the International Tourism Trade Fair ITB in Berlin, Germany, March 7, 2018. REUTERS/Fabrizio Bensch

African airlines have recorded a 34.6 per cent surge in air cargo amid a marginal improvement in demand, globally. The International Air Transport Association (IATA), in its latest data for the month of September 2021, showed that demand continued to be well above pre-crisis levels and that capacity constraints persist.

Global demand, measured in cargo tonne-kilometers (CTKs), was up 9.1 per cent compared to September 2019 (9.4 per cent for international operations). Capacity remains constrained at 8.9 per cent below pre-COVID-19 levels (September 2019) (-12 per cent for international operations).

African airlines, however, saw international cargo volumes increase by 34.6 per cent in September – the largest increase of all regions for the ninth consecutive month.

Seasonally adjusted volumes are now 20 per cent above pre-crisis 2019 levels but have been trending sideways for the past six months. International capacity was 6.9 per cent higher than pre-crisis levels, the only region in positive territory, albeit on small volumes.

Several factors impacting global air cargo demand were observed. For instance, supply chain disruptions and the resulting delivery delays have led to long supplier delivery times.

This typically means manufacturers use air transport, which is quicker, to recover time lost during the production process. The September global Supplier Delivery Time Purchasing Managers Index (PMI) was at 36, values below 50 are favorable for air cargo.

The September new export orders component and manufacturing output component of the PMIs have deteriorated from levels in previous month but remain in favourable territory. Manufacturing activity continued to expand at a global level but there was contraction in emerging economies.

The inventory-to-sales ratio remains low ahead of the peak year-end retail events such as Single’s Day, Black Friday and Cyber Monday. This is positive for air cargo, however, further capacity constraints put this at risk.

The cost-competitiveness of air cargo relative to that of container shipping remains favourable. Pre-crisis, the average price to move air cargo was 12.5 times more expensive than sea shipping. In September 2021, it was only three times more expensive.

IATA’s Director General, Willie Walsh, said there is a benefit from supply chain congestion as manufacturers turn to air transport for speed.

“But severe capacity constraints continue to limit the ability of air cargo to absorb extra demand. If not addressed, bottlenecks in the supply chain will slow the economic recovery from COVID-19. Governments must act to relieve pressure on global supply chains and improve their overall resilience,” Walsh said.

To relieve supply chain disruptions, including those highlighted by the United States on supply chain resilience on the sidelines of last weekend’s G20 Summit, IATA called on governments to ensure that air crew operations are not hindered by COVID-19 restrictions designed for air travellers.

To implement the commitments that governments made at the International Civil Aviation Organisation’s (ICAO) High Level Conference on COVID-19 to restore international connectivity. This will ramp-up vital cargo capacity with “belly” space. Also, to provide innovative policy incentives to address labour shortages where they exist.

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