Air cargo demand continued to improve in October but at a slower pace compared to the previous month, according to global air freight market data released on Monday by the International Air Transport Association (IATA), the trade body representing the majority of global airline companies.
According to IATA, air cargo demand is still below previous year levels but is expected to improve by the end of the year due to shoppers’ reliance on e-commerce during the Covid-19 pandemic and impending vaccine deliveries.
“The end of the year is always peak season for air cargo. That will likely be exaggerated with shoppers relying on e-commerce – 80 percent of which is delivered by air. So the capacity crunch from the grounded aircraft will hit particularly hard in the closing months of 2020. And the situation will become even more critical as we search for capacity for the impending vaccine deliveries,” said IATA Director General and CEO Alexandre de Juniac.
- Global demand was 6.2 percent below previous-year levels in October (-7.5 percent for international operations) – an improvement from the 7.8 percent year-on-year decline in September. However, the pace of recovery in October was slower than in September with month-on-month demand growing 4.1 percent and 1.1 percent for internationally.
- Global capacity shrank by 22.6 percent in October (24.8 percent for international operations) compared to the previous year – almost four times greater than the contraction in demand, demonstrating the continuing and severe capacity crunch.
- Strong regional variations continue with North American and African carriers reporting year-on-year gains in demand up 6.2 percent and 2.2 percent, respectively. All other regions remained in negative territory compared to a year earlier.
- European carriers reported a decrease in demand of 11.9 percent in October compared to the previous year marking an improvement from the 15.6 percent drop in September 2020. According to IATA, air cargo in the region has been largely unaffected by the resurgence of the Covid-19. International capacity decreased 28 percent – an improvement from the 32.6 percent fall the previous month.
- Improving performance is aligned with improvements in key economic indicators: the Purchasing Managers’ Index (PMI) stayed above the 50-mark for the second month in a row; global goods trade continued to trend upwards in recent months, but the uptick will not be sufficient to avoid a full-year decline of 9.2 percent compared to 2019; the Global Composite PMI reflecting changes in global output, employment, new business, backlogs and prices, indicates that economic recovery will continue in Q4 2020 despite a resurgence of Covid-19 in many markets.
“Demand for air cargo is coming back – a trend we see continuing into the fourth quarter. The biggest problem for air cargo is the lack of capacity as much of the passenger fleet remains grounded,” said de Juniac.