The International Air Transport Association (IATA) has released its latest data for May 2023, revealing weak market conditions in the global air cargo industry. The data shows a decline in global demand, measured in cargo tonne-kilometers (CTKs), by 5.2% compared to May 2022 (with a 6.0% decline in international operations). However, capacity, measured by available cargo tonne-kilometers (ACTKs), increased by 14.5% compared to the same period last year, primarily due to the recovery of passenger business and the resulting increase in belly capacity. Overall, capacity levels are now 5.9% higher than pre-pandemic levels in May 2019.
The weak market conditions can be attributed to several factors, including a contraction of 1.4% in new export orders and a 5.2% year-on-year decrease in production Purchasing Managers Index (PMI) for global manufacturing. These indicators suggest a cooling in global manufacturing demand. Additionally, global goods trade declined by 0.8% in April, affected by macroeconomic challenges and supply chain constraints. Container shipping demand also contracted by 0.2%, while air cargo demand experienced a 6.3% year-on-year decline, indicating a preference for maritime cargo.
The recent increase in the global supplier delivery time PMI, from a low of 35 in October 2021 to 54.5 in May 2023, suggests shorter delivery times and some relief for supply chains. However, it also reflects weaker global goods trade demand.
Commenting on the data, Willie Walsh, Director General of IATA, acknowledged the challenging trading conditions for air cargo, citing the 5.2% decline in demand and various economic indicators pointing to weakness. He expressed optimism for improvements in the second half of the year, anticipating the moderation of inflation in many markets and the expected tapering of central bank rate hikes. These factors are likely to stimulate economic activity and positively impact the demand for air cargo.
Analyzing regional performance, Asia-Pacific airlines experienced a 3.3% decrease in air cargo volumes in May 2023 compared to the same month in 2022. This decline was more pronounced than the previous month (-0.3%) due to a stronger contraction in international air cargo demand (-6.4%). Meanwhile, North American carriers witnessed the weakest performance for the third consecutive month, with an 8.1% decrease in cargo volumes compared to May 2022. However, this was a slight improvement compared to April (-12.4%). European carriers saw a 6.7% decrease in cargo volumes in May 2023, an improvement from April (-7.7%). Middle Eastern carriers experienced a 3.1% year-on-year decrease, while Latin American carriers achieved a positive performance with a 3.6% increase in cargo volumes. African airlines recorded a 2.4% drop in demand compared to May 2022.
Observers say despite the challenging conditions, there are indications in the air cargo for improvements in the coming months. As economic factors stabilize and central banks adjust their policies, the industry is expected to gain a positive impact on demand for air cargo, potentially leading to a recovery in global trade and improved market conditions.
