Air Cargo Declines Show Signs of Narrowing in May

Air cargo demand declines are continuing to narrow as the year progresses but still remain down on 2019 levels.

The latest statistics from IATA show that air cargo traffic in cargo tonne km (CTK) terms declined by 5.2% year on year in May and by 7% compared with 2019 levels.

Meanwhile, capacity is up 45% year on year resulting in an 8.6 percentage decline in load factors in May to 41.5%.

While demand is down for the fifteenth month in a row, the rate of decline has continued to reduce from the 16.8% fall registered in January and is also below the 9% fall registered for the year to date.

The airline association is optimistic about further improvements in the second half.

IATA director general Willie Walsh said: “Trading conditions for air cargo continue to be challenging with a 5.2% fall in demand and several economic indicators pointing towards weakness. The second half of the year, however, should bring some improvements.

“As inflation moderates in many markets, it is widely expected that central bank rate hikes will taper. This should help stimulate economic activity with a positive impact on demand for air cargo.”

IATA said the decline in CTKs was principally driven by the softening demand experienced by carriers in North America and Europe as a result of high inflation in the regions, the war in Ukraine, and disruption to supply chains following Covid.

Looking at regional performance, Asia Pacific airlines registered a 3.3% fall in demand in May with performance weakening compared with April.

North American carriers registered the weakest performance of all regions for the third consecutive month with an 8.1% drop in May.

“Notably, airlines in the region saw the third month of double-digit contractions in volumes on the North America-Europe trade lane (-10.3%),” IATA said.

European carriers experienced a 6.7% decrease in cargo volumes in May 2023, although this was an improvement compared with April.

Middle Eastern carriers experienced a 3.1% year-on-year decrease in cargo volumes in May 2023, said IATA.

The best performing carriers were those from the Latin America region as they registered a 3.6% increase in cargo volumes compared to May 2022.

African airlines posted a 2.4% decrease in demand compared to May 2022.

“This was a decline in performance compared to the previous month (-0.9%),” IATA said. “Notably, the growth on the Africa to Asia trade route slowed significantly in May from 18.5% in April to 11%, possibly due to the impact of the conflict in Sudan since mid-April.”