Global air cargo demand declined in March, impacted by the effects of Omicron in Asia, the Russia-Ukraine war and a challenging operating backdrop, the International Air Transport Association (IATA) reported Tuesday.
Global demand fell 5.2 percent compared to March 2021, while capacity was up 1.2 percent for the same time period. IATA noted that while this is in positive territory, the metric marks a significant decline from February’s 11.2 percent year-on-year increase. Asia and Europe experienced the largest capacity declines.
IATA cited several factors contributing to the operating environment, including the war in Ukraine leading to a fall in cargo capacity used to serve Europe, as several airlines based in Russia and Ukraine were key cargo players. Sanctions against Russia led to disruptions in manufacturing and rising oil prices are having a negative economic impact, including raising costs for shipping.
Global goods trade has declined in 2022, with China’s economy growing more slowly due to Covid-19 related lockdowns and supply chain disruptions amplified by the war in Ukraine.
“Air cargo markets mirror global economic developments,” IATA director general Willie Walsh said. “In March, the trading environment took a turn for the worse. The combination of war in Ukraine and the spread of the Omicron variant in Asia have led to rising energy costs, exacerbated supply chain disruptions and fed inflationary pressure. As a result, compared to a year ago, there are fewer goods being shipped, including by air. Peace in Ukraine and a shift in China’s Covid-19 policy would do much to ease the industry’s headwinds. As neither appears likely in the short-term, we can expect growing challenges for air cargo.”
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Asia-Pacific airlines saw their air cargo volumes decrease 5.1 percent in March compared to the same month in 2021. Available capacity in the region fell 6.4 percent compared to March 2021, the largest drop of all regions.
North American carriers posted a 0.7 percent year-over-year dip in cargo volume in March. Demand in the Asia-North America market declined significantly, with seasonally adjusted volumes falling 9.2 percent, IATA noted. Capacity was up 6.7 percent from a year earlier.
European airlines saw an 11.1 drop in cargo volume in the month compared to March 2022. This was the weakest of all regions, as the “Within Europe” market fell 19.7 percent, which IATA attributed to the war in Ukraine.
“Labor shortages and lower manufacturing activity in Asia due to Omicron also affected demand,” IATA said, reporting a capacity decline of 4.9 percent.
Middle Eastern carriers experienced a 9.7 percent year-on-year decrease in cargo volume in March. Significant benefits from traffic being redirected to avoid flying over Russia failed to materialize, IATA noted, likely due to subdued demand overall. Capacity was up 5.3 percent in the period.
Latin American airlines reported an increase of 22.1 percent in cargo volume in March from a year earlier–the strongest performance of all regions, as some of the largest airlines in the region are benefitting from the end of bankruptcy protection. Capacity in March was up 34.9 percent compared to the same month in 2021.
African airlines saw cargo volumes increase 3.1 percent in the month from March 2021. Capacity was 8.7 percent above March 2021 levels.