IATA: Air cargo volumes take a hit in February

Air cargo traffic fell in February as coronavirus-related factory closures and travel restrictions began to hit the market.

According to IATA cargo tonne kms (CTK) dropped by 1.3% year on year in February, while cargo capacity was down by 4.4% and the average load factor improved by 1.5 percentage points to 46.4%.

However, IATA said that if seasonal effects are taken into account — the timing of the Chinese New Year holiday and an extra leap day due to the leap year — the drop off in cargo traffic would have been much larger at 9.1%. This is the largest ever drop off in terms of seasonally adjusted demand.

The worst affected carriers were those based in the Asia Pacific region.

IATA director general and chief executive Alexandre de Juniac said: “The spread of COVID-19 intensified over the month of February, and with it, the impact on air cargo.

“Adjusted demand for air cargo fell by 9.1%. Asia-Pacific carriers were the most affected with a seasonally-adjusted drop of 15.5%. What has unfolded since is a story of two halves.

“The disruption of global supply chains led to a fall in demand. But the dramatic disruption in passenger traffic resulted in even deeper cuts to cargo capacity.

“And the industry is struggling to serve remaining demand with the limited capacity available. We only got a first glimpse of this in February. Among all the uncertainty in this crisis, one thing is clear—air cargo is vital.

“It is delivering lifesaving drugs and medical equipment. And it is supporting global supply chains. That’s why it is critical for governments to remove any blockers as the industry does all it can to keep the global air cargo network functioning in the crisis and ready for the recovery.”

IATA said the month witnessed several significant developments:

  • Manufacturing production in China, one of the world’s largest air cargo markets, dropped sharply due to widespread factory closures and travel restrictions.
  • Global export orders fell to a historically low level. The global Purchasing Managers Index (PMI) is in contraction territory, with all major trading nations reporting falling orders. 
  • Significant cargo capacity was lost as a result of airlines reducing passenger operations in response to government travel restrictions due to Covid-19, severely impacting global supply chains.

Asia-Pacific airlines saw demand for air cargo contract by 2.2% in February 2020, compared with the year-earlier period. Seasonally-adjusted cargo demand fell by 15.5% compared to January 2020, to levels last seen in early 2014.

“The drop in demand was largely due to the impact of Covid-19,” IATA said. Capacity decreased 17.7% – the largest fall since early 2013. Cargo capacity in China dropped sharply in February, driven in large part by the collapse of belly-hold capacity. 

“North American airlines saw demand decrease by 1.8% in February 2020, compared with the same period a year earlier. Capacity increased by 4.1%. Cargo traffic on the Asia-North America trade lanes decreased by 2.4% year on year as a result of factory closures in Asia due to Covid-19,” IATA explained.

European airlines posted a 4.1% decrease in cargo demand in February 2020 compared with the same period a year earlier. European carriers were among the first to cancel flights to and from Asia, contributing to the drop in demand in February.

“The Within Europe market decreased by 7.8% year-on-year,” the association explained. “This suggests that the region was affected by global supply chain disruptions and early Covid-19 containment measures – notably in Northern Italy, an important manufacturing region. Capacity decreased by 3.8% year on year.”

Middle Eastern airlines’ cargo demand increased 4.3% in February 2020 compared with the year-ago period. Capacity increased by 6.0%.

However, IATA said that 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 experienced an increase in freight demand in February 2020 of 1.8%. Capacity decreased by 2.6% year-on-year.

The region was relatively unaffected by the outbreak in February.

“However, disrupted global supply chains and a fragile economic backdrop in some countries in the region continue to create headwinds for air cargo.”

Finally, African carriers posted the fastest growth of any region for the 12th consecutive month in February 2020, with an increase in demand of 6.2% compared with the same period a year earlier. Capacity grew 3% year on year. The Africa-Asia and Africa-Middle East trade lanes continue to bring robust growth to the region. 

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Damian Brett

Damian Brett
I have been writing about the freight and logistics industry since 2007 when I joined International Freighting Weekly to cover the shipping sector.After a stint in PR, I have gone on to work for Containerisation International and Lloyds List - where I was editor of container shipping - before joining Air Cargo News in 2015.Contact me on [email protected]