The effects of Omicron in Asia and the Russia-Ukraine war continued to create a challenging operating backdrop that drove a drop in demand and contraction in capacity in April, a new report from the International Air Transport Association (IATA) showed.
Global air cargo demand fell 11.2 percent compared to April 2021 and capacity was 2 percent below a year earlier, with Asia experiencing the largest fall in capacity, IATA noted. The war in Ukraine led to a fall in cargo capacity used to serve Europe, as several airlines based in Russia and Ukraine were key cargo players, while the zero-Covid policy in China led to capacity challenges due to flight cancellations over labor shortages.
“The combination of the war in Ukraine and Covid-19 lockdowns in China have pushed up energy costs, intensified supply chain disruptions and fed inflation,” Willie Walsh, IATA’s director general, said. “The operating environment is challenging for all businesses, including air cargo. But with China easing lockdown restrictions, there is cause for some optimism and the supply-demand imbalance is keeping yields high.”
Asia-Pacific airlines saw air cargo volume decrease 15.8 percent in April compared to the same month in 2021 for the weakest performance of all regions.
“Airlines in the region have been heavily impacted by lower trade and manufacturing activity due to Omicron-related lockdowns in China,” IATA said. “Because of this, available capacity in the region fell 19.4 percent compared to April 2021, the largest drop of all regions.”
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North American carriers posted a 6.6 percent year-over-year decrease in cargo volume in the month. Demand in the Asia-North America market declined significantly, but other key routes such as Europe-North America remained strong. Capacity was up 5.2 percent compared to April 2021.
IATA said several carriers in the region are set to receive delivery of freighters, which should help address pent-up demand on routes where it is needed.
European carriers saw a 14.4 percent decrease in cargo volume in April and the intra-Europe market fell 24.6 percent month on month, attributable to the war in Ukraine, labor shortages and lower manufacturing activity in Asia due to Omicron. Capacity fell 0.2 percent year on year.
Middle Eastern carriers experienced a 11.9 percent year-on-year decrease in cargo volume in April. IATA said significant benefits from traffic being redirected to avoid flying over Russia failed to materialize, likely due to persisting supply chain issues in Asia. Capacity was up 6 percent from April 2021.
Latin American carriers reported an increase of 40.9 percent in cargo volume in April compared to the 2021 period, the strongest performance of all regions. Capacity in April was up 67.8 percent.
“Airlines in this region have shown optimism by introducing new services and capacity, and in some cases investing in additional aircraft for air cargo in the coming months,” IATA said.
African airlines saw cargo volumes decrease 6.3 percent year over year in April after a 3.1 percent increase the previous month. Capacity was 1.5 percent below April 2021.