Global air freight markets showed demand stabilization in July, the International Air Transport Association (IATA) reported earlier this week, but it remained at lower levels than 2019.
IATA said while there was some month-to-month improvement, it is at a slower pace than some of the traditional leading indicators suggest. This is mainly due to the capacity constraint from the loss of available belly cargo space as passenger aircraft remain largely grounded
Global demand fell 13.5 percent in July compared with the previous year. That is a modest improvement from the 16.6 percent year-on-year drop recorded in June, IATA noted, while seasonally adjusted demand grew 2.6 percent month-on-month in July.
Global capacity contracted 31.2 percent in the month compared with July 2019, which was a small improvement from the 33.4 percent year-on-year drop in June. Belly capacity for international air cargo shrank 70.5 percent in July compared to the previous year, owing to the withdrawal of passenger services amid the Covid-19 pandemic. This was partially offset by a 28.8 percent increase in capacity through expanded use of freighter aircraft, according to IATA.
“Economic indicators are improving, but we have not yet seen that fully reflected in growing air cargo shipments,” Alexandre de Juniac, IATA’s director general and CEO, said. “That said, air cargo is much stronger than the passenger side of the business and one of our biggest challenges remains accommodating demand with severely reduced capacity. If borders remain closed, travel curtailed and passenger fleets grounded, the ability of air cargo to keep the global economy moving will be challenged.”
Asia-Pacific airlines saw demand for international air cargo fall 15.3 percent in July compared to the same time last year. After a robust initial recovery in May, month-on-month growth seasonally adjusted demand has softened in the region.
North American carriers reported a 5.4 percent demand decline for the month.
“The stronger performance is due in part to strong demand on the transpacific, Asia-North America route, reflecting e-commerce demand for products manufactured in Asia,” IATA said in its monthly report.
European airlines reported a 22.4 percent annual drop in international cargo volumes in July. This was a slight improvement from June’s 27.6 percent decline. IATA said demand on most key trade lanes in the region remained weak. The large Europe–Asia market was down 20 percent.
Middle Eastern carriers saw a decline of 14.9 percent in year-on-year international cargo volumes in July, an improvement from a 19 percent fall in June. Seasonally adjusted demand grew 7.2 percent month-on-month in July–the strongest of all regions.
Latin American airlines posted a 32.1 percent drop in year-on-year international demand in July, down from a 28.6 percent decline in June. The drop in both demand and capacity was the most severe of all regions.
“The Covid-19 crisis is particularly challenging at present for airlines based in Latin America owing to strict lock-down measures,” IATA said. “In July, the Latin American air cargo market was smaller than the African market for the first time since these statistics have been reported in 1990.”
African airlines posted a contraction of 3 percent in July, down from a 3.8 percent increase in demand in June. The small Africa-Asia market continued to support the region’s performance, IATA added.