info@worldairnews.co.za  | +27 11 465 7706

Connecting Skies Bridging Continents

AIR CARGO DEMAND STRENGTHENS DESPITE CHALLENGES

The International Air Transport Association has released data for the July 2023 global air cargo markets, showing a continuing trend of recovering growth rates since February.


July air cargo demand was tracking just 0.8% below the previous year’s levels. Although demand is now basically flat compared to 2022, this is an improvement on recent months’ performance that is particularly significant given declines in global trade volumes and rising concerns over China’s economy.


It is worth noting during the month under review, African airlines had the strongest performance in July 2023, with a 2.9% increase in cargo volumes compared to July 2022 and that Africa-Asia routes experienced significant cargo demand growth of 10.3%.


In addition African cargo capacity was 11.0% above July 2022 levels and accounted for 2.0% of the total global air cargo market.

In general this is despite global demand, measured in cargo tonne-kilometres or CTKs, tracked at 0.8% below July 2022 levels (-0.4% for international operations). This was a significant improvement over the previous month’s performance (-3.4%).


In terms of capacity, measured in available cargo tonne-kilometrers or ACTKs, was up 11.2% compared to July 2022 (8% for international operations). The strong uptick in ACTKs reflects the growth in belly capacity (29.3% year-on-year) due to the summer season.


This took place in the context of an operating environment such as both the manufacturing output Purchasing Managers Index or PMI (49.0) and new export orders PMI (46.4) were below the critical threshold represented by the 50 mark, indicating a decline in global manufacturing production and exports.


Global cross-border trade contracted for the third month in a row in June, decreasing 2.5% year-over-year, reflecting the cooling demand environment and challenging macroeconomic conditions. The difference between the annual growth rates of air cargo and the global goods trade narrowed to -0.8 percentage points in June. While air cargo growth is still lagging world trade, the gap is the narrowest since January 2022.


In July, the global supplier delivery time PMI was 51.9, signalling fewer supply chain delays. All major economies, except China, had PMIs above 50. The US, Europe and Japan recorded PMIs of 54.2, 57.7, and 50.4, respectively.


Inflation saw a mixed picture in July, with the increase in US consumer prices picking up pace for the first time in 13 months. Meanwhile, in China, both consumer and producer prices fell, pointing to a possible deflationary economy.


“Compared to July 2022, demand for air cargo was basically flat. Considering we were 3.4% below 2022 levels in June, that’s a significant improvement. And it continues a trend of strengthening demand that began in February. How this trend will evolve in the coming months will be something to watch carefully. Many fundamental drivers of air cargo demand, such as trade volumes and export orders, remain weak or are deteriorating. And there are growing concerns over how China’s economy is developing. At the same time, we are seeing shorter delivery times, which is normally a sign of increasing economic activity. 


Amid these mixed signals, strengthening demand gives us good reason to be cautiously optimistic,” said Willie Walsh, IATA director general.

Share the Post:

RELATED POSTS