IATA: January demand remains muted as economic constraints continue

Photo: Jaromir Chalabala/ Shutterstock

Economic constraints have continued to take their toll on industry demand as January became the 11th month in a row that air cargo volumes declined, according to IATA.

Global demand, measured in cargo tonne-kilometers (CTKs), fell 14.9% year on year, said the industry body.

Meanwhile, fuelled by a resurgence in belly capacity, overall capacity in January, measured in available CTK, was up 3.9% compared to January 2022.

Additionally, CLIVE Data Services recently said that global air cargo capacity increased for the eleventh consecutive month in February, up 11% on the same period last year.

And the latest statistics from the Baltic Exchange Airfreight Index (BAI) showed airfreight rates continued their downward spiral in January but are still above pre-Covid levels.

Highlighting the challenging operating conditions for the air cargo industry, IATA said this was the first year-on-year increase in capacity since October 2022.

”With January cargo demand down 14.9% and capacity up 3.9%, 2023 began under some challenging business conditions,” said Willie Walsh, IATA’s director general.

“That was accompanied by persistent uncertainties, including war in Ukraine, inflation, and labour shortages. But there is solid ground for some cautious optimism about air cargo. Yields remain higher than pre-pandemic.

“And China’s much faster than expected shift from its zero Covid policy is stabilising production conditions in air cargo’s largest source market. That will give a much-needed demand boost as companies increase their engagement with China.”

Worldwide, Latin America was the only region to see an increase in cargo volumes.

Latin America carriers reported a 4.6% increase in cargo volumes in January 2023 compared to January 2022, although capacity was up 34.4% compared to the same month in 2022. 

European carriers saw the weakest performance of all regions with a 20.4% decrease in cargo volumes in January 2023 year on year, and Asia Pacific airlines saw their air cargo volumes decrease by 19% in January year on year.

African airlines saw cargo volumes decrease by 9.5% in January 2023 compared to January 2022, but this was an improvement on December 2022. Capacity was also 1.8% below January 2022 levels.

North American carriers posted an 8.7% decrease in cargo volumes in January 2023 compared to the same month in 2022, while Middle Eastern carriers experienced an 11.8% year-on-year decrease in cargo volumes in January.

However, IATA noted that although global goods trade decreased 3% in December, manufacturing export activity has increased.

“The global new export orders component of the manufacturing PMI, a leading indicator of cargo demand, increased in January for the first time since October 2022,” said IATA.

“For major economies, new export orders are growing, and in China and the US, PMI levels are close to the critical 50-mark indicating that demand for manufactured goods from the world’s two largest economies is stabilising.”

Another positive point recently highlighted by data provider TAC Index is that the air cargo market could be showing the first signs of a possible recovery fuelled by the restart of production at Chinese factories.

IATA: Mixed outlook as volumes decline again in December

First signs of recovery in air cargo?

Air cargo capacity rises above pre-pandemic level while industry faces risk of zero growth

Rates on major trades down but still more than 50% above pre-Covid levels

 

 

 

 

 

 

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Rebecca Jeffrey

Rebecca Jeffrey
New to aviation journalism, I joined Air Cargo News in late 2021 as deputy editor. I previously worked for Mercator Media’s six maritime sector magazines as a reporter, heading up news for Port Strategy. Prior to this, I was editor for Recruitment International (now TALiNT International). Contact me on: [email protected]