Global air cargo markets showed a 9.9 percent improvement on pre-Covid-19 performance (June 2019).
This pushed first half-year air cargo growth to eight percent, its strongest first half performance since 2017 (when the industry posted 10.2 percent year-on-year growth), says the International Air Transport Association (IATA) in its monthly report
Global demand for June 2021, measured in cargo tonne-kilometers (CTKs), was up 9.9 percent compared to June 2019.Regional variations in performance are significant. North American carriers contributed 5.9 percentage points (ppts) to the 9.9 percent growth rate in June. Middle East carriers contributed 2.1 ppts, European airlines 1.6 ppts, African airlines 0.5 ppts and Asia-Pacific carriers 0.3 ppts. Latin American carriers did not support the growth, shaving 0.5 ppts off the total.
Overall capacity, measured in available cargo tonne-kilometers (ACTKs), remained constrained at 10.8 percent below pre-COVID-19 levels (June 2019) due to the ongoing grounding of passenger aircraft. Belly capacity was down 38.9 percent on June 2019 levels, partially offset by a 29.7 percent increase in dedicated freighter capacity.
Underlying economic conditions and favorable supply chain dynamics remain highly supportive for air cargo. The US inventory to sales ratio is at a record low. This means that businesses have to quickly refill their stocks, and typically use air cargo to do so.
The Purchasing Managers Indices (PMIs) – leading indicators of air cargo demand – show that business confidence, manufacturing output and new export orders are growing at a rapid pace in most economies. Concerns of a significant consumer shift from goods to services have not materialized.
The cost-competitiveness and reliability of air cargo relative to that of container shipping has improved. The average price of air cargo relative to shipping has reduced considerably. And scheduling reliability of ocean carriers has dropped, in May it was around 40 percent compared to 70 to 80 percent prior to the crisis.
“Air cargo is doing brisk business as the global economy continues its recovery from the COVID-19 crisis. With first-half demand eight percent above pre-crisis levels, air cargo is a revenue lifeline for many airlines as they struggle with border closures that continue to devastate the international passenger business. Importantly, the strong first-half performance looks set to continue,” said Willie Walsh, IATA’s director general.
June 2021 (% chg vs the same month in 2019)
1 % of industry CTKs in 2020 2 Change in load factor vs 2019 3 Load factor level
Asia-Pacific airlines saw demand for international air cargo increase by 3.8 percent in June 2021 compared to the same month in 2019. International capacity remained constrained in the region, down 19.8 percent versus June 2019. Even though demand remains high, the region faces moderate headwinds from the lack of international capacity and manufacturing PMIs that are not as strong as in Europe and the US.
North American carriers posted a 23.4 percent increase in international demand in June 2021 compared to June 2019. Underlying economic conditions and favorable supply chain dynamics remain supportive for air cargo carriers in North America. International capacity decreased by 2.1 percent compared with June 2019.
European carriers posted a 6.6 percent increase in international demand in June 2021 compared to the same month in 2019. International capacity decreased by 16.2 percent in June 2021 versus June 2019. Manufacturing PMIs are very strong in Europe indicating that market dynamics remain supportive for air cargo carriers in Europe.
Middle Eastern carriers posted a 17.1 percent rise in international cargo volumes in June 2021 versus June 2019, boosted by strong performances on the Middle East to Asia and Middle East to North America trade routes. International capacity in June was down nine percent compared to the same month in 2019.
Latin American carriers reported a decline of 22.9 percent in international cargo volumes in June compared to the 2019 period. This was the worst performance of all regions and a weakening of performance compared to the previous month. International capacity decreased 28.4 percent in June 2021 compared to June 2019. This weak performance is mostly due to local airlines losing market share to carriers from other regions.
African airlines’ international cargo demand in June increased 33.5 percent compared to the same month in 2019. This was the strongest performance of all regions, but notably on small volumes (African carriers carry two percent of global cargo). International capacity in June decreased by 4.9 percent compared to the same month in 2019.