Declines in air cargo demand leveling off, says IATA report

BY MIKE OCHONMA

While global air cargo demand in February was down 7.5 percent in year-on-year terms, it was also 2.9 percent higher than it had been in February 2019, before the Covid-19.

This was reported by the International Air Transport Association (IATA), the representative body of the global airline industry in its latest monthly survey of the sector. In terms of year-on-year, international air cargo demand declined 8.3 percent in February.

According to IATA director-general Willie Walsh, “The story of air cargo in February is one of slowing declines. Year-on-year demand fell by 7.5 percent. That’s half the rate of decline experienced in January’’.

“This shifting of gears was sufficient to boost the overall industry into positive territory (+2.9 percent) compared with the pre-pandemic levels. An optimistic eye could see the start of an improvement trend that leads to market stabilisation and a return to more normal patterns after dramatic ups-and-downs in recent years”.

Air cargo capacity in February was up 8.6 percent, year-on-year. This was the result of the increase in airliner belly hold capacity, as the air passenger sector continued its recovery. International belly hold capacity jumped by 57 percent, year-on-year, in February, recovering to 75.1 percent of the figure in February 2019.

IATA cited three major economic trends that had a bearing on the air cargo business.

First, one of the leading indicators for air cargo demand, the new export orders element of the manufacturing Purchasing Managers’ Index (PMI), continued to rise in February. Chinese PMI passed the crucial 50-mark, showing that demand for manufactured goods from that country (the world’s number one export economy) was increasing.

Second, the decline in the global goods trade decelerated; in January (y-o-y) it was down 1.5 percent, but in December last year, it had been down 3.3. percent.

Third, consumer price index inflation in the group of seven leading democratic economies in February was 6.4 percent, a decrease from the 6.7 percent recorded in January. Producer price inflation in December (the most recent available data) had been 2.2 percentage points down, to 9.6%.

In terms of IATA’s regions, all but one recorded decelerations in declining demand. The exception was Latin America, where a yera-on-year increase in demand of 4.6 percent in January turned into a 2.7 percent decrease in February.

For Africa, the year-on-year decrease in February was 3.4 percent, but in January it had been 9.5 percent. In the Asia-Pacific, the February decline was 6 percent, but that in January had been 19 percent.

In Europe, the falls had been 15.3 percent and 20.4 percent respectively, while for the Middle East they had been 8.1 percent and 11.8 percent. For North America, the year-on-year decrease in February had been 3.2 percent, as against a decline in January of 8.7 percent.