The true impact of the coronavirus hadn’t even been felt yet–that will come in February’s results–but global air freight market demand still descended 3.3 percent in January compared to the same time in 2019, the International Air Transport Association (IATA) reported Wednesday.
January marked the 10th consecutive month of year-on-year declines in cargo volumes. Cargo capacity rose 0.9 percent year-on-year in January, making it 21 straight months that capacity has outstripped demand.
“The air cargo industry started the year on a weak footing,” Alexandre de Juniac, IATA’s director general and CEO, said. “There was optimism that an easing of U.S.-China trade tensions would give the sector a boost in 2020. But that has been overtaken by the COVID-19 outbreak, which has severely disrupted global supply chains, although it did not have a major impact on January’s cargo performance. Tough times are ahead. The course of future events is unclear, but this is a sector that has proven its resilience time and again.”
January’s weak performance was skewed by Lunar New Year in 2020 coming earlier, Jan. 25, than in 2019, Feb. 5. This meant many Chinese manufacturers closed for at least the last week of the month this year.
As an overview, airlines in Asia-Pacific and Europe suffered sharp declines in year-on-year growth in air cargo volumes in January, while North American and Middle East carriers experienced a more moderate falloff. Latin America and Africa were the only regions to record growth in air freight demand compared to January 2019.
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Asia-Pacific airlines saw demand for air cargo contract 5.9 percent in January compared to the year-earlier period. This was the sharpest drop in freight demand of any region for the month.
“Seasonally adjusted cargo demand rose slightly however, following the thawing of U.S.-China trade relations,” IATA said. “The impact from COVID-19 is expected to affect February’s performance.”
North American airlines saw demand drop 1.3 percent in the month compared to January 2019. IATA noted that seasonally adjusted cargo demand rose slightly, however, “amid a more supportive operating environment and following the thawing of U.S.-China trade relations.”
European airlines posted a 3.7 percent decline in cargo demand in January compared to the same month time last year–more than double the 1.3 percent drop in year-on-year demand in December.
Cargo volumes at Middle Eastern airlines fell 1.4 percent in the month from the year-ago period.
“Against a backdrop of operational and geopolitical challenges facing some of the region’s key airlines, seasonally adjusted freight volumes ticked down in January, but a modest upward trend has been sustained,” IATA said. “However, given the Middle East’s position connecting trade between China and the rest of the world, the region’s carriers have significant exposure to the impact of COVID-19 in the period ahead.”
Latin American airlines saw an increase 0f 1.4 percent in freight demand in January compared to a year earlier, reversing the 2.5 percent decrease in December. Seasonally adjusted freight volumes in the region also ticked upward, girded by new route connections, which is a positive development for the region’s carriers, IATA said.
African carriers posted the fastest growth of any region for the 11th consecutive month in January, with a gain of 6.8 percent compared to the same period a year earlier. Growth on the smaller Africa-Asia trade lanes contributed to the positive performance.