Global air cargo demand remained supressed in May, falling 5.2 pc over May 2022, says IATA, adding that capacity has risen beyond 2019 levels, but mainly due to more passenger aircraft flying.

Global airline industry association, the International Air Transport Association (IATA) says its data for May 2023 shows global air cargo markets showing weak market conditions.

In a press statement IATA says that the global demand, measured in cargo tonne-kilometers (CTKs), fell 5.2 pc compared to May 2022, about 6 pc for international operations.

IATA says that capacity, as measured by available cargo tonne-kilometers (ACTKs), rose 14.5 pc compared to May 2022, primarily driven by belly capacity which increases as demand in the passenger business recovers. Capacity is now 5.9 pc above pre-pandemic levels recorded in May 2019.

IATA says there are many factors driving the demand down. The global manufacturing Purchasing Managers Index (PMI) indicates an annual contraction of 1.4 pc in new export orders and a decrease of 5.2 pc year-on-year in production PMI. This suggests a cooling in global manufacturing demand.

Global goods trade decreased by 0.8 pc in April, due to macroeconomic challenges and supply chain constraints. Trading conditions appeared to favour maritime cargo as demand for container shipping contracted by 0.2 pc while air cargo demand weakened by 6.3 pc year-on-year.

The global supplier delivery time PMI increased to 54.5 in May, up from its low of 35 in October 2021, indicating shorter delivery times and some relief for supply chains. However, this is also a sign of weaker global goods trade demand.

“Trading conditions for air cargo continue to be challenging with a 5.2 pc 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,” says Willie Walsh, IATA’s Director General.

The largest market, Asia-Pacific airlines saw their air cargo volumes decrease by 3.3 pc in May 2023 compared to the same month in 2022. This was a decrease in performance compared to April by -0.3 pc, mainly due to the stronger annual contraction in international air cargo demand from -3.5 pc in April to -6.4 pc this month. Available capacity in the region increased by 38.3 pc compared to May 2022 as more belly capacity came online from the passenger side of the business.

IATA says that North American carriers saw the weakest performance of all regions for the third consecutive month with an 8.1 pc decrease in cargo volumes in May 2023 compared to the same month in 2022. This was a slight improvement in performance compared to April when they had declined by 12.4 pc.

European carriers experienced a 6.7 pc decrease in cargo volumes in May 2023, compared to the same month in 2022. This was an improvement in performance compared to April, when it dropped by 7.7 pc, in part due to the smaller annual contraction in international CTKs on the Europe-Middle East trade lane, from -4.7 pc in April to -2.9 pc in May. The decline in international cargo traffic on markets within-Europe also improved from -16.2 pc in April to -7.8 pc this month (seasonally adjusted). Meanwhile, capacity increased 5.6pc in May 2023 compared to May 2022.

IATA report says that the Middle Eastern carriers experienced a 3.1 pc year-on-year decrease in cargo volumes in May 2023. This was a slight improvement in performance compared to the previous month of -6.7 pc. Capacity increased 15.6 pc compared to May 2022.

Meanwhile, Latin American carriers had the only positive performance in May 2023 posting a 3.6 pc increase in cargo volumes compared to May 2022. This was an improvement in performance compared to April, a fall of 1.6% pc. Capacity in May was up 14.7 pc compared to the same month in 2022.

IATA says that African airlines posted a 2.4 pc decrease in demand compared to May 2022. This was a decline in performance compared to the previous month of -0.9 pc. Notably, the growth on the Africa to Asia trade route slowed significantly in May from 18.5 pc in April to 11.0 pc, possibly due to the impact of the conflict in Sudan since mid-April. Capacity in May was up 9.2 pc compared to the same month in 2022.