Geopolitical disruption and fuel pressures weigh on cargo markets despite underlying trade growth

GENEVA — The International Air Transport Association (IATA) has reported a 4.8% year-on-year decline in global air cargo demand for March 2026, reflecting significant disruption to key trade corridors linked to the Middle East.

DISRUPTION AT GULF HUBS DRIVES GLOBAL DECLINE

Total cargo demand, measured in cargo tonne-kilometres (CTK), fell by 4.8%, while capacity declined by 4.7% compared to March 2025. International cargo operations recorded a steeper contraction of 5.5%.

The decline was largely attributed to severe disruption at major Gulf hubs, which continue to play a central role in global cargo connectivity. The timing of the post–Lunar New Year slowdown also contributed to weaker volumes during the period.

UNDERLYING TRADE CONDITIONS REMAIN POSITIVE

Despite the decline in air cargo volumes, broader economic indicators continue to support underlying demand.

Global industrial production grew by 3.1% year-on-year, marking continued expansion, while global goods trade increased by 8.0%. Manufacturing sentiment remained in growth territory, with the Purchasing Managers’ Index (PMI) at 51.4.

These indicators suggest that the current contraction is driven primarily by operational and geopolitical factors rather than a structural weakening in demand.

REGIONAL PERFORMANCE SHOWS STRONG DIVERGENCE

Regional cargo performance reflected significant variation:

• Asia-Pacific carriers recorded a 5.4% increase in demand
• European airlines saw growth of 2.2%
• Latin American carriers reported a 1.8% increase
• African airlines led global growth with a 7.0% rise

In contrast, Middle Eastern carriers experienced a 54.3% decline in demand, the sharpest drop globally, reflecting the concentration of disruption within the region’s hub-based cargo networks.

North American carriers reported a marginal decline of 1.2%.

TRADE LANES RECONFIGURE UNDER PRESSURE

Cargo flows across global trade lanes shifted in response to disruption:

• Africa–Asia and Europe–Asia corridors continued to grow strongly
• Intra-Asia trade maintained momentum
• Routes linked to the Middle East saw significant contraction, including Europe–Middle East and Middle East–Asia lanes

These shifts indicate a reconfiguration of cargo networks as operators adjust routing strategies to maintain supply chain continuity.

FUEL COSTS AND SUPPLY EMERGE AS CRITICAL FACTORS

Fuel market dynamics are becoming an increasingly significant pressure point for the sector.

Jet fuel prices rose sharply in March, increasing by over 100% year-on-year, alongside substantial increases in crude oil prices and refining margins. These cost pressures are expected to test airline resilience in the coming months.

OUTLOOK: FLEXIBILITY AND RESILIENCE UNDER TEST

IATA noted that air cargo networks continue to demonstrate flexibility in adapting to geopolitical disruption, tariff pressures, and operational constraints.

While demand fundamentals remain intact, the combination of airspace disruption, fuel volatility, and shifting trade patterns is likely to define cargo market performance in the near term.