Air freight markets showed a slight improvement in May, but capacity remains unable to meet demand as a result of the loss of belly cargo operations on passenger aircraft that have been parked, the International Air Transport Association (IATA) reported Wednesday.
Global air cargo demand fell 20.3 percent in May compared to a year earlier, an improvement from the 25.6 percent year-on-year drop recorded in April. At the same time, global capacity contracted 34.7 percent compared to the previous year, a slight deceleration from the 41.6 percent year-on-year drop in April.
Belly capacity for international air cargo shrank 66.4 percent in the month compared to May 2019 due to the withdrawal of passenger services amid the COVID-19 crisis. This was up slightly from the 75.1 percent year-on-year decline in April. The decline was partially offset by a 25.2 percent increase in capacity through expanded use of freighter aircraft, IATA said.
The cargo load factor rose 10.4 percent in May, which was a slight decrease from the 12.8 percent rise in April. But IATA noted that the extent of the increase indicates there is still pent-up demand for air cargo that cannot be met due to the continued grounding of many passenger flights.
“The gap between demand and capacity shows the challenge in finding the space on the aircraft still flying to get goods to market,” Alexandre de Juniac, IATA’s director general and CEO, said. “For that, the prospects for air cargo remain stronger than for the passenger business, but the future is very uncertain. Economic activity is picking up from April lows as some economies unlock. But predicting the length and depth of the recession remains difficult.”
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All regions suffered declines in May. Airlines in Europe and Latin America saw the sharpest drops in year-on-year growth in air freight volumes, while airlines in Asia-Pacific and the Middle East experienced slightly smaller declines. Airlines in North America and Africa saw more moderate drops compared to the other regions, IATA reported.
Asia-Pacific airlines’ demand for international air cargo fell 21.3 percent in May compared to the same time a year earlier. This was an improvement over the 25.2 percent decline in April.
“Seasonally adjusted freight volumes also rebounded slightly in May and have now reached 75 percent of their pre-COVID-19 crisis levels,” IATA said. “Shipments of personal protective equipment (PPE) are helping support airlines in the region.”
North American carriers reported 9 percent fall in international cargo demand year-on-year in May, the smallest contraction of all regions except Africa.
“The resilient performance is due to shorter and less stringent lockdowns in certain regions, the large freighter fleets of a few regional airlines, as well as robust U.S.-China trade volumes,” IATA said. “Demand on the large Asia–North America route was down only 0.4 percent year-on-year in May.”
European carriers reported a 29.7 percent annual drop in international cargo volumes in May, the weakest performance of all regions. Limited manufacturing output and lockdowns through mid-May contributed to the weak performance.
Middle Eastern carriers reported a decline of 25 percent year-on-year in May, a significant improvement from the 36.2 percent falloff in April.
Latin American carriers posted a 22.1 percent decrease in year-on-year international demand, decidedly better than the 40.7 percent decline in April. IATA said the COVID-19 crisis is particularly challenging for airlines based in Latin America owing to strict lockdown measures.
African airlines had the smallest contraction of any region in May, extending a run of resilient performance. Year-on-year international demand fell 6.3 percent. The small Africa-Asia market was particularly resilient in May, down only 0.4 percent.