International cargo capacity increased 1.4 pc compared to January 2022
The data for global air cargo markets released by International Air Transport Association (IATA) for January 2023 shows demand declined as economic headwinds persist.
According to a new report released by International Air Transport Association (IATA), global air cargo demand, measured in cargo tonne-kilometers (CTKs), fell by 14.9 pc compared to January 2022, with international operations declining more steeply at 16.2 pc.
In a press statement, IATA says that the capacity, measured in available cargo tonne-kilometers, ACTK, was up 3.9 pc compared to January 2022. This was the first year-on-year growth in capacity since October 2022, says IATA, adding that international cargo capacity increased 1.4 pc compared to January 2022. The uptick in ACTKs reflects the strong recovery of belly capacity in passenger airline markets offsetting a decline international capacity offered by dedicated freighters.
IATA says that several factors in the operating environment impacted the results. The global new export orders component of the manufacturing PMI, a leading indicator of cargo demand, increased in January for the first time since October 2022. For major economies, new export orders are growing, and in China and the US, PMI levels are close to the critical 50-mark indicating that demand for manufactured goods from the world’s two largest economies is stabilising, says IATA.
It adds that global goods trade decreased by 3.0 pc in December, which was the second monthly decline in a row. In addition, the Consumer Price Index for G7 industrialised countries decreased from 7.4 pc in November to 6.7 pc in January, while inflation in producer (input) prices reduced by 2.2 percentage points to 9.6 pc in December.
Willie Walsh
“With January cargo demand down 14.9 pc and capacity up 3.9 pc, 2023 began under some challenging business conditions. That was accompanied by persistent uncertainties, including war in Ukraine, inflation, and labor shortages. But there is solid ground for some cautious optimism about air cargo. Yields remain higher than pre-pandemic. And China’s much faster than expected shift from its zero COVID policy is stabilizing production conditions in air cargo’s largest source market. That will give a much-needed demand boost as companies increase their engagement with China,” says Willie Walsh, IATA’s Director General.
The performance of airlines in Asia Pacific region was badly hit as their air cargo volumes decreased by 19 pc in January 2023 compared to the same month in 2022, although this was an improvement in performance compared to December, when it had declined by 21.2 pc. Airlines in the region continue to be impacted by lower levels of trade and manufacturing activity and disruptions in supply chains due to the residual effects of Covid-19 restrictions that were imposed by China.
Additionally, the positioning of the Lunar New Year would have impacted cargo volumes in January. Available capacity in the region increased by 8.8 pc compared to January 2022. The statement adds that North American carriers posted an 8.7 pc decrease in cargo volumes in January 2023 compared to the same month in 2022. This was a slight decrease in performance compared to December, when it had fallen by 8.5 pc and capacity increased 2.3 pc compared to January 2022. IATA says that the worst hit were the European airlines with a 20.4% decrease in cargo volumes in January 2023 compared to the same month in 2022. This was a decrease in performance compared to December (-19.4 pc). Airlines in the region continue to be most affected by the war in Ukraine. Capacity decreased 9.3 pc in January 2023 compared to January 2022. Middle Eastern airlines experienced a 11.8 pc year-on-year decrease in cargo volumes in January 2023. This was an improvement to the previous month (-14.4 pc). Capacity increased 9.6 pc compared to January 2022. Going against the trend, airlines in Latin America reported a 4.6 pc increase in cargo volumes in January 2023 compared to January 2022.
IATA says that this was the strongest performance of all regions, and a significant improvement in performance compared to December which saw no growth. Capacity in January was up 34.4 pc compared to the same month in 2022. And African carriers saw cargo volumes decrease by 9.5 pc in January 2023 compared to January 2022. This was an improvement in performance compared to the previous month (-10 pc), while their capacity was 1.8 pc below January 2022 levels.
