Air cargo demand continued to be well above pre-crisis levels in October 2021.
According to the International Air Transport Association (IATA) global demand, measured in cargo tonne-kilometers (CTKs), was up 9.4 percent compared to October 2019, and up 10.4 percent for international operations.
Capacity constraints have eased slightly but remain 7.2 percent below pre-COVID-19 levels (October 2019), and down 8.0 percent for international operations.
Economic conditions continue to support air cargo growth but are slightly weaker than in the previous months.
Supply chain disruptions and the resulting delivery delays have led to long supplier delivery times. This typically results in manufacturers using air transport, which is quicker, to recover time lost during the production process. The global Supplier Delivery Time Purchasing Managers Index (PMI) reached an all-time low of 34.8 in October; values below 50 are favorable for air cargo.
Relevant components of the October PMIs (new export orders and manufacturing output) have been in a gradual slowdown since May but remain in favorable territory.
The inventory-to-sales ratio remains low ahead of the peak year-end retail events such as Christmas. This is positive for air cargo as manufacturers turn to air cargo to rapidly meet demand.
Global goods trade and industrial production remain above pre-crisis levels.
The cost-competitiveness of air cargo relative to that of container shipping remains favorable.
“October data reflected an overall positive outlook for air cargo. Supply chain congestion continued to push manufacturers towards the speed of air cargo,” said Willie Walsh, IATA’s director general.
Walsh warned however of possible increasing capacity constraints resulting from governments implementing travel restrictions to curb the spread of the Omicron variant of Covid-19.
“The impact of government reactions to the Omicron variant is a concern. If it dampens travel demand, capacity issues will become more acute. After almost two years of Covif-19, governments have the experience and tools to make better data-driven decisions than the mostly knee-jerk reactions to restrict travel that we have seen to date,” he said.
“Restrictions will not stop the spread of Omicron. Along with urgently reversing these policy mistakes, the focus of governments should be squarely on ensuring the integrity of supply chains and increasing the distribution of vaccines.”
1 % of industry CTKs in 2020 2 Change in load factor vs 2019 3 Load factor level
Asia-Pacific airlines saw international air cargo volumes increase 7.9 percent in October 2021 compared to the same month in 2019. This was close to a doubling in growth compared to the previous month’s four percent expansion. The improvement was partly driven by increased capacity on Europe-Asia routes as several important passenger routes reopened.
Belly capacity between the continents was down 28.3 percent in October, much better than the 37.9 percent fall in September. International capacity in the region eased slightly in October, down 12.9 percent compared to the previous year, a significant improvement over the 18.9 percent drop in September.
North American carriers posted an 18.8 percent increase in international cargo volumes in October 2021 compared to October 2019. This was on par with September’s performance (18.9 percent).
Demand for faster shipping times and strong US retail sales are underpinning the North American performance. International capacity was down 0.6 percent compared to October 2019, a significant improvement from the previous month.
European carriers saw an 8.6 percent increase in international cargo volumes in October 2021 compared to the same month in 2019, an improvement compared to the previous month (5.8 percent).
Manufacturing activity, orders and long supplier delivery times remain favorable to air cargo demand. International capacity was down 7.4 percent compared to pre-crisis levels, a significant improvement from the previous month which was down 12.8 percent on pre-crisis levels.
Middle Eastern carriers experienced a 9.4 percent rise in international cargo volumes in October 2021 versus October 2019, a significant drop in performance compared to the previous month (18.4 percent). This was due to a deterioration in traffic on several key routes such as Middle East-Asia, and Middle East-North America. International capacity was down 8.6 percent compared to October 2019, a decrease compared to the previous month (four percent).
Latin American carriers reported a decline of 6.6 percent in international cargo volumes in October compared to the 2019 period, which was the weakest performance of all regions, but an improvement compared to the previous month (a 17 percent fall). Capacity in October was down 28.3 percent on pre-crisis levels, a decrease from September, which was down 20.8 percent on the same month in 2019.
African airlines saw international cargo volumes increase by 26.7 percent in October, a deterioration from the previous month (35 percent) but still the largest increase of all regions. International capacity was 9.4 percent higher than pre-crisis levels, the only region in positive territory, albeit on small volumes.