PRESS RELEASE
Examining the first half of the year, demand exhibited an 8.1% decrease versus the January-June timeframe of 2022, and a comparable 8.7% decline for international operations. However, there is a silver lining as the demand in June 2023 remained just 2.4% below the levels seen in June 2019, a time before the pandemic struck
The latest data released by the International Air Transport Association (IATA) reveals a notable improvement in global air cargo markets for the month of June 2023. This marks a significant step forward, showing the mildest year-on-year decline in demand since the outset of February 2022.
During June, the worldwide demand, measured in cargo tonne-kilometers (CTKs), experienced a 3.4% dip compared to the same period in 2022, with international operations witnessing a slightly higher contraction of 3.7%. Examining the first half of the year, demand exhibited an 8.1% decrease versus the January-June timeframe of 2022, and a comparable 8.7% decline for international operations. However, there is a silver lining as the demand in June 2023 remained just 2.4% below the levels seen in June 2019, a time before the pandemic struck.
Contrastingly, capacity, as gauged by available cargo tonne-kilometers (ACTKs), demonstrated a 9.7% uptick when compared to June 2022. This rate of increase, while still positive, is slower than the double-digit surges recorded between March and May. This strategic shift in capacity highlights the adaptive measures that airlines are adopting within the context of a weakened demand scenario. Notably, the cumulative capacity for the first half of 2023 registered a growth of 9.9% year-on-year. This has led to a current capacity level that is 3.7% higher than that of June 2019, the period preceding the pandemic.
Several pivotal factors have played a role in shaping air cargo demand trends:
In June, both the Purchasing Managers Index (PMI) for manufacturing output (49.2) and new export orders (47.1) lingered below the critical benchmark of 50. These readings underscore a decline in worldwide manufacturing production and exports.
The global cross-border trade observed a 2.4% year-on-year reduction in May, indicative of the cooling demand environment and challenging macroeconomic conditions. As of May, the disparity between annual growth rates for air cargo and global goods trade narrowed to a mere -2.6 percentage points, reflecting the smallest gap since January 2022. Despite this progress, it is clear that air cargo is still grappling with the impact of the global trade deceleration more significantly than its containerized counterpart.
“We retain optimism that the testing trading circumstances for air cargo will gradually moderate in tandem with the subsiding inflation in major economies. This potential scenario may prompt central banks to relax their monetary policies, thereby catalyzing increased economic vibrancy,” expressed Willie Walsh, Director General of IATA.
As the air cargo industry navigates these intricate dynamics, the data for June 2023 suggests a measured step towards recovery, with careful consideration of various global economic influences. The aviation sector continues to adapt and respond, fostering a sense of hope for a more resilient future.
June Regional Performance
Asia-Pacific airlines saw their air cargo volumes decrease by 3.6% in June 2023 compared to the same month in 2022. This was also a decline compared to May (-2.5%), mainly owing to weak demand on within-Asia markets, although the Asia-North America trade lane saw improved performance. Available capacity in the region increased by 24.4% compared to June 2022. Looking at the first half of 2023, cargo demand was down 6.5% versus the year-ago period against a 27.0% rise in capacity.
North American carriers had a 6.5% decrease in total cargo volumes in June 2023 compared to the same month in 2022, marking the fourth consecutive month in which the region had the weakest performance. This was, however, an improvement compared to May (-8.6%). Europe-North America CTKs shrank by only 2.7% in June, following three months of double-digit contractions. Capacity increased 0.7% compared to June 2022. For the 2023 first half, cargo demand was down 10.5% compared to the 2022 first half, while capacity dipped 0.7%.
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Contrastingly, capacity, as gauged by available cargo tonne-kilometers (ACTKs), demonstrated a 9.7% uptick when compared to June 2022
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This rate of increase, while still positive, is slower than the double-digit surges recorded between March and May
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This strategic shift in capacity highlights the adaptive measures that airlines are adopting within the context of a weakened demand scenario. Notably, the cumulative capacity for the first half of 2023 registered a growth of 9.9% year-on-year
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This has led to a current capacity level that is 3.7% higher than that of June 2019, the period preceding the pandemic
European carriers experienced a 2.8% decrease in cargo volumes in June 2023, compared to the same month in 2022. This was an improvement in performance compared to May (-6.6%), in part due to the aforementioned Europe-North America performance. Capacity increased 4.4% compared to June 2022. Cargo demand was down 10.2% for the first six months of 2023 compared to last year, as the half-year capacity rose 2.5%.
Middle Eastern carriers posted a 0.5% increase in cargo volumes in June 2023 versus a year ago. This was a strong turnaround from the 2.9% year-over-year decline registered in May. Capacity rose 11.1% for the month. Both Middle East-Asia and Middle East-Europe route areas saw annual growth. For the first half of the year, cargo demand was down 5.6% compared to a year ago, with an 11.2% hike in capacity.
Latin American carriers had strongest performance in June 2023, with a 7.3% increase in cargo volumes compared to June 2022. This was an improvement compared to May (+3.8%). Capacity in June was up 15.4% over the same month in 2022. For the 2023 first half, cargo demand was up 0.9% versus a year ago, while capacity climbed 18.0%.
African airlines posted a 2.8% decrease in demand compared to June 2022. This was a decline in performance compared to the previous month (-1.9%). Capacity in June was down 3.7% compared to the same month in 2022. For the first half of the year, cargo demand slowed by 4.4% while capacity climbed 1.6%.
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