Economic conditions continue to support air cargo growth but are slightly weaker than in the previous months indicating that global manufacturing growth has peaked
Aviation demand is gradually picking up with the opening up of the businesses after global mass vaccination drive.
A recent IATA (International Air Transport Association) report stated strong demand with growth trend. Still there is pressure on capacity.
The IATA in its statement said, “As comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of Covid-19, unless otherwise noted, all comparisons below are to August 2019 which followed a normal demand pattern.”
Following are the trends listed by the IATA:
- Global demand, measured in cargo tonne-kilometers (CTKs*), was up 7.7 per cent compared to August 2019 (8.6 per cent for international operations). Overall growth remains strong compared to the long-term average growth trend of around 4.7 per cent.
- The pace of growth slowed slightly compared to July, which saw demand increase 8.8 per cent (against pre-COVID-19 levels).
- Cargo capacity recovery paused in August, down 12.2 per cent compared to August 2019 (13.2 per cent for international operations). In month-on-month terms, capacity fell by 1.6 per cent – the largest drop since January 2021.
Economic conditions continue to support air cargo growth but are slightly weaker than in the previous months indicating that global manufacturing growth has peaked:
- The August manufacturing output component of the Purchasing Managers Indices (PMIs) was 51.9, indicating a short-term boost to demand if those orders are shipped by air. This was a decline from 54.4 in July.
- The August new export orders component of the PMIs was favorable for air cargo, despite being less supportive than in the previous months. Expansion continued at the global level, however, there was contraction in emerging economies.
- The inventory-to-sales ratio remains low ahead of the peak year-end retail season. This is positive for air cargo, however further capacity constraints put this at risk.
“Air cargo demand had another strong month in August, up 7.7 per cent compared to pre-COVID levels. Many of the economic indicators point to a strong year-end peak season. With international travel still severely depressed, there are fewer passenger planes offering belly capacity for cargo. And supply chain bottlenecks could intensify as businesses continue to ramp up production,” said Willie Walsh, IATA’s Director General.
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Air Cargo in the Spotlight
- The 77th IATA AGM and World Air Transport Summit in Boston Massachusetts, USA, will feature a panel discussion of air cargo leaders on Tuesday 5 October 2021.
- The 14th World Cargo Symposium will do a deep dive into the challenges and opportunities for air cargo in Dublin, Ireland from 13-14 October 2021.
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August Regional Performance
Asia-Pacific airlines saw their international air cargo volumes increase 3.0 per cent in August 2021 compared to the same month in 2019.This was a slowdown in demand compared to the previous month’s 4.4 per cent expansion. Demand is being affected by an easing in growth momentum in key activity indicators in Asia, and by congested supply chains especially on Within Asia and Europe-Asia routes. International capacity is significantly constrained in the region, down 21.7 per cent vs. August 2019.
North American carriers posted an 18 per cent increase in international cargo volumes in August 2021 compared to August 2019. New export orders and demand for faster shipping times are underpinning the North American performance. The downside risk from capacity constraints is high; international cargo capacity remains restricted and many of the key air cargo hubs are reporting severe congestion, including Los Angeles and Chicago. International capacity decreased 6.6 per cent.
Latin American carriers reported a decline of 14 per cent in international cargo volumes in August compared to the 2019 period, which was the weakest performance of all regions.
European carriers saw a 6 per cent increase in international cargo volumes in August 2021 compared to the same month in 2019. This was on a par with July’s performance. Manufacturing activity, orders and long supplier delivery times remain favorable to air cargo demand. International capacity decreased 13.6 per cent.
Middle Eastern carriers experienced an 15.4 per cent rise in international cargo volumes in August 2021 versus August 2019, an improvement compared to the previous month (13.4 per cent). The large Middle East–Asia trade lanes continue to post strong performance. International capacity decreased 5.1 per cent.
Latin American carriers reported a decline of 14 per cent in international cargo volumes in August compared to the 2019 period, which was the weakest performance of all regions. Capacity remains significantly constrained in the region, with international capacity decreasing 27.1 per cent in August, the largest fall of any region.
African airlines’ saw international cargo volumes increase by 33.9 per cent in August, the largest increase of all regions. Investment flows along the Africa-Asia route continue to drive the regional outcomes with volumes on the route up 26.4 per cent over two years ago. International capacity decreased 2.1 per cent.
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