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Air Cargo Conundrum: Demand Plummets but Capacity Disappears Even Faster

Global air freight demand plunged 27.7 percent in April compared to a year earlier–the sharpest decline ever recorded–the International Air Transport Association (IATA) reported Wednesday.

Even with the falloff, there was insufficient capacity to meet demand as a result of the loss of belly cargo operations on passenger aircraft, IATA said, as those airlines continued to operate at meager levels during the global pandemic.

Global capacity diminished 42 percent in April compared to the previous year, with belly capacity for international air cargo shrinking 75 percent. This was partially offset by a 15 percent increase in capacity through expanded use of freighter aircraft.

The cargo load factor rose 11.5 percent in the month, the largest increase since tracking began. IATA said the magnitude of the rise suggests there is significant demand for air cargo that cannot be met due to the cessation of most passenger flights.

“There is a severe capacity crunch in air cargo,” Alexandre de Juniac, IATA’s director general and CEO, said. “Airlines are deploying as much capacity as possible, including special charter operations and the temporary use of passenger cabins for cargo. Governments need to continue to ensure that vital supply lines remain open and efficient.  While many have responded with speed and clarity to facilitate the movement of cargo, government red-tape, particularly in Africa and Latin America, is preventing the industry from flexibly deploying aircraft to meet the demands of the pandemic and the global economy.”

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Delays in getting operational permits issued, blockages at the border and inadequate ground infrastructure to, from and within airport environments continue to hamper air cargo in countries in Africa and Latin America, IATA said.

“Air cargo needs to move efficiently throughout the entire supply chain to be effective,” IATA said.

It urged governments to accelerate approvals for cargo operations, expedite customs clearance for urgently needed medical supplies, and ensure there is adequate staff on the ground and land-based infrastructure to move cargo efficiently.

The plummeting demand was widespread, although the large Asia-North America market recorded less of a decline at 7.3 percent due to the rise in movement of personal protective equipment (PPE) needed to combat coronavirus.

North American carriers reported a fall in international demand of 20.1 percent year-on-year in April. This was the smallest contraction of all regions. While still a significant drop, it remains less than the 32.3 percent decline seen at the height of the global financial crisis in April 2009.

Asia-Pacific airlines saw demand for international air cargo fall 28.1 percent, while European carriers reported a 33.8 percent annual drop in international cargo volumes in April. However, the large Europe-Asia market recorded less of a decline due to the rise in movement of PPE.

Middle Eastern carriers reported a decrease of 36.2 percent year-on-year in April. Despite a number of carriers in the region maintaining some cargo capacity, traffic on all key routes was low, IATA said.

Latin American carriers posted the sharpest fall–a 38.9 percent decline–in international demand.

“The COVID-19 crisis is particularly challenging for airlines based in Latin America owing to strict containment measures and a lack of support from governments to keep cargo moving,” IATA said.

African airlines were less affected by disruptions from COVID-19 than other regions in April. They saw year-on-year international demand fall 20.9 percent, while the small Africa-Asia market was the most resilient route in April, down only 1 percent.