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Air cargo records marginal growth amid economic constraints

By Guardian Nigeria
11 March 2022   |   4:04 am
The International Air Transport Association (IATA) has released data for global air cargo markets showing slower growth in January 2022.

IATA’s Director General, Willie Walsh

The International Air Transport Association (IATA) has released data for global air cargo markets showing slower growth in January 2022. Supply chain disruptions and capacity constraints, as well as a deterioration in economic conditions for the sector dampened demand.

Global demand, measured in cargo tonne-kilometres, was up 2.7 per cent compared to January 2021 (3.2 per cent for international operations). This was significantly lower than the 9.3 per cent growth seen in December 2021 (11.1 per cent for international operations).

Capacity was 11.4 per cent above January 2021 (10.8 per cent for international operations). While this is in positive territory, compared to pre-COVID-19 levels, capacity remains constrained, 8.9 per cent below January 2019 levels.

IATA’s Director General, Willie Walsh, noted that the demand growth of 2.7 per cent in January was below expectation, following the 9.3 per cent recorded in December.

“This likely reflects a shift towards the more normal growth rate of 4.9 per cent expected for this year. Looking ahead, however, we can expect cargo markets to be impacted by the Russia-Ukraine conflict. Sanction-related shifts in manufacturing and economic activity, rising oil prices and geopolitical uncertainty are converging. Capacity is expected to come under greater pressure and rates are likely to rise. To what extent, however, it is still too early to predict,” Walsh said.

He added that the Russia Ukraine conflict will have a negative impact on air cargo. Airspace closures will stop direct connectivity to many markets connected to Russia.

“Overall, the impact on global markets is expected to be low as cargo carried to/from/within Russia accounted for just 0.6 per cent of the global cargo carried by air in 2021. Several specialised cargo carriers are registered in Russia and Ukraine, particularly those involved with heavy lift operations,” he said.

In regional performance for the month of January, African airlines’ saw cargo volumes increase by 12.4 per cent in January 2022 compared to January 2021. The region was the strongest performer. Capacity was 13.0 per cent above January 2021 levels.

Asia-Pacific airlines saw their air cargo volumes increase 4.9 per cent in January 2022 compared to the same month in 2021. This was significantly below the previous month’s 12.0 per cent expansion. Available capacity in the region was up 11.4 per cent compared to January 2021, however it remains heavily constrained compared to pre-COVID-19 levels, down 15.4 per cent compared to 2019. The zero-COVID policy in mainland China and Hong Kong is impacting performance. Preparations for the Lunar New Year holiday may have also had an impact on volumes, but it is difficult to isolate.

North American carriers posted a 1.2 per cent decrease in cargo volumes in January 2022 compared to January 2021. This was significantly below December’s performance (7.7 per cent). Supply chain congestion due to labor shortages, severe winter weather and issues with the deployment of 5G as well as a rise in inflation and weaker economic conditions affected growth. Capacity was up 8.7 per cent compared to January 2021.

European carriers saw a 7.0 per cent increase in cargo volumes in January 2022 compared to the same month in 2021. While this was slower than the previous month (10.6 per cent), Europe was more resilient than most other regions. European carriers benefited from robust economic activity and an easing in capacity. Capacity was up 18.8 per cent in January 2022 compared to January 2021, and down 8.1 per cent compared to pre-crisis levels (2019).

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