The International Air Transport Association (IATA) has released its data for global air freight markets, which suggests a slight improvement in cargo demand, albeit at a slower pace than was expected.
In each case, global demand for cargo largely improved in June when compared with May, however overall figures are well below that of June 2019. The figures are also below expectations previously made for June.
This comes as the IATA recently announced it has downgraded its expectations for a return to pre-COVID demand levels, extending this to 2024, a year longer than previously advised.
This is a direct result of the ongoing global COVID-19 pandemic, which has cut global travel demand and flight capacity by close to 100 per cent.
The facts and figures
According to IATA data, global demand for freight, measured in cargo tonne-kilometres (CTKs), fell 17.6 per cent year-on-year in June, although still recorded a slightly stronger result than that of May, which saw a year-on-year decline of 20.1 per cent.
Meanwhile, global capacity, measured in available cargo tonne-kilometres (ACTKs), shrank by 34.1 per cent in June compared with the previous year. This was similar to the 34.8 per cent year-on-year drop recorded in May.
Belly capacity for international air cargo shrank by 70 per cent year-on-year in June, due to the withdrawal of passenger services amid COVID-19. This was partially offset by a 32 per cent increase in capacity through expanded use of freighter aircraft, according to the report.
Alexandre de Juniac, IATA’s director general and CEO, said, “Cargo is, by far, healthier than the passenger markets, but doing business remains exceptionally challenging. While economic activity is re-starting after major lockdown disruptions there has not been a major boost in demand.
“The rush to get personal protective equipment (PPE) to market has subsided as supply chains regularised, enabling shippers to use cheaper sea and rail options. And the capacity crunch continues because passenger operations are recovering very slowly.”
International market breakdown
According to the IATA data, all regions recorded yearly declines in June. This is not unexpected considering the outbreak of COVID-19.
However, airlines in Europe and Latin America suffered the sharpest drops in year-on-year growth in total air freight volumes, while airlines in Asia-Pacific and the Middle East experienced slightly less dramatic declines.
Overall, airlines in North America and Africa saw more moderate drops compared with the other regions.
Airlines in the Asia-Pacific region saw demand for international air cargo fall by 20 per cent in June 2020 compared with the same period a year earlier. This was a slight deterioration over the 18.8 per cent drop in May. Despite manufacturing starting to pick up in the region, demand was impacted by the reduction in shipments of PPE by air. International capacity decreased 32.3 per cent.
North American carriers reported a single digit fall in international cargo demand of 8.8 per cent year-on-year in June. This was the smallest contraction of all regions. The resilient performance is reportedly due to the large freighter fleets of a few of the region’s airlines as well as the fiscal support to airlines in the US from the CARES Act. International capacity decreased 30.7 per cent.
European carriers reported a 27.6 per cent annual drop in international cargo volumes in June. This was a slight improvement from May’s performance of -29.5 per cent but still the second weakest performance of all regions. International capacity decreased 40.7 per cent.
Middle Eastern carriers reported a decline of 19.1 per cent year-on-year in June, an improvement from the 24.9 per cent fall in May. International capacity decreased 25.8 per cent, the best of all regions. This was driven by the aggressive operational strategies of some of the region’s carriers.
Latin American carriers posted a 29.4 per cent drop in year-on-year international demand in June. This was the weakest performance of all regions. International capacity decreased 43.6 per cent, indicating a sizeable capacity crunch. The COVID-19 crisis is particularly challenging at present for airlines based in Latin America owing to strict lockdown measures.
African airlines posted a contraction of 13.8 per cent in June when compared with the previous year. This was a weaker performance than the 7.3 per cent annual fall in demand recorded in May. The small Africa-Asia market continued to grow in June, up 20.1 per cent. However, the region suffered from the effects of the pandemic becoming more severe in June. International capacity in this region decreased 46.2 per cent.