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29 March 2024

Regional airlines lead world’s air cargo growth

Published
By Staff

Global air cargo growth accelerated 4.7 per cent in May compared to a year ago, led by the Middle Eastern and African carriers.

The International Air Transport Association (Iata) published data for global air freight markets which showed that cargo volumes, measured by freight tonne kilometres (FTKs), were up across all regions, but with significant differences in performance.

Middle East carriers reported 9.3 per cent year-on-year growth whereas the corresponding growth rate for North American carriers stood at 2.4 per cent.

The acceleration of growth reflects improved economic conditions. There are indications that world trade and business confidence is improving after weakness in the first quarter. In particular, Chinese manufacturing activity rebounded in May, with a corresponding rise in export order growth.

“After several months of wavering conditions in the demand environment, the outlook for global air cargo appears to be stabilising. That’s good news but the sector still faces an uphill battle to restore competitiveness and increase its share of trade growth. This will not be achieved with a business-as-usual mindset.

“The competitors to air cargo are innovating aggressively, cutting end-to-end shipping times and improving efficiency. There is tremendous potential in the e-cargo agenda to help shorten average shipping times by 48 hours from the current average of 6.5 days. Airlines have a pivotal role through expanding the use of e-Air Waybills. But success will need a united approach across the value chain,” said Tony Tyler, Iata’s Director General and CEO.  

Iata said the outlook for air freight markets appears to be stabilising after some signs of wavering in prior months. Global business confidence continues to signal economic growth, and May data suggest that conditions could be picking-up after a slowdown in Q1.

World trade volumes declined throughout the first three months of the year, but latest data show a reversal in that trend. Moreover, new exports orders are also on the rise once more, which bodes well for both world trade and air freight demand.

Regional analysis in depth

Asia-Pacific carriers recorded a strong increase of 5.3 per cent year-on-year. Regional trade volumes have picked-up again, and there are signs that the slowdown in the Chinese economy is easing. Capacity grew a little faster than demand, at 6.0 per cent, but the region still has the highest freight load factor (55.5 per cent).

North American carriers grew by a modest 2.4 per cent in May, down on the April year-on-year growth rate of 3.5 per cent. This reflects the general slowdown in the US economy in the first quarter. However, the latest data supports a return to trade and business growth. Capacity was down 0.2 per cent.

European airlines expanded 3.4 per cent in May. The month-on-month rise was solid at 0.6 per cent (compared to 0.3 per cent growth recorded in April), pointing to a consistent improvement in economic activity. If GDP accelerates in the second quarter, that should support continued growth in air freight volumes in the coming months. Capacity increased 4.0 per cent.

Middle East carriers continue to see the highest rate of growth, expanding 9.3 per cent in May compared to a year ago. Stronger expansion in developed markets is combining with rising links to emerging economies to fuel growth. Capacity grew 10.6 per cent.

Latin American airlines recorded an increase of 4.9 per cent year-on-year, responding to a pick-up in trade growth. This may be a spike in business activity associated with the FIFA World Cup. Capacity climbed 4.5 per cent, slightly slower than demand.

African carriers’ demand increased by 7.2 per cent in May, considerably ahead of the average growth of 2.9 per cent for 2014. Weaker growth in the major African economies in the first months of the year appears to be ending, which will hopefully fuel stronger performance in the months ahead. Capacity rose 7.2 per cent, exactly in line with demand.