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The International Air Transport Association (IATA) released October data for global air cargo markets showing that air cargo demand continued to improve, but at a slower pace than the previous month and remains below levels. from the previous year.
Global demand, measured in cargo ton-kilometers (CTKs *), was 6.2% below the levels of the previous year in October (-7.5% for international operations). This is an improvement over the 7.8% year-on-year drop recorded in September. However, the pace of recovery in October was slower than in September, with a month-on-month demand growth of 4.1% (1.1% for international).
Global capacity, measured in tonne-kilometers of available cargo (ACTK), decreased by 22.6% in October (? 24.8% for international operations) compared to the previous year. That’s almost four times the contraction in demand, indicating the continuing severe contraction in capacity.
Strong regional variations continue with North American and African airlines reporting year-on-year gains in demand (+ 6.2% and + 2.2% respectively), while all other regions remained in negative territory compared to the previous year.
The performance improvement is aligned with improvements in key economic indicators;
The new export orders component of the manufacturing purchasing managers index (PMI) remained above the 50 mark for the second consecutive month. Results above 50 indicate economic growth. This is a significant development as the PMI had been in negative growth territory from mid-2018 to August 2020;
World trade in goods continued on an upward trend in recent months, according to the World Trade Organization. The rebound will not be enough to avoid an annual drop of 9.2% compared to 2019. However, much of this ground will recover in 2021 with an annual growth expectation of 7.2%;
The global composite PMI, reflecting changes in global production, employment, new business, backorders and prices, indicates that the economic recovery will continue in the fourth quarter of 2020 despite the resurgence of the COVID-19 virus in many markets.
“Demand for air cargo is returning, a trend that we see will continue in the fourth quarter. The biggest problem for air cargo is lack of capacity, as much of the passenger fleet remains on the ground. The end of the year is always the peak season for air cargo. This is likely over the top with shoppers relying on e-commerce, 80% of which is delivered over the air. Therefore, the reduction in aircraft capacity on the ground will particularly affect the final months of 2020. And the situation will become even more critical as we seek capacity for the imminent vaccine deliveries, ”said Alexandre de Juniac, Director General and CEO of IATA.
October 2020 (% YEAR TO YEAR) worldshare1 ctk actk CLF (% – PT)? 2 CLF (LEVEL)? 3
Total market
100%
-6.20%
-22.6%
10.0%
57.6%
Africa
1.8%
2.2%
-22.5%
12.1%
50.2%
Pacific Asia
34.5%
-12.8%
-23.9%
7.8%
61.7%
Europe
23.6%
-11.6%
-27.6%
11.8%
65.1%
Latin America
2.8%
-13.0%
-32.2%
9.8%
44.3%
Middle East
13.0%
-2.0%
-22.8%
12.8%
60.6%
North America
24.3%
6.2%
-16.4%
10.6%
49.6%
Regional Performance October 2020
Asia Pacific airlines saw demand for international air cargo drop 11.6% in October 2020 compared to the same month a year earlier. This was an improvement from the 14.6% drop in September 2020 and the second consecutive month of improvement. International capacity remained restricted in the region, 28.7% less. However, this was an improvement over the 31.8% drop in capacity in the previous month. Airlines in the region reported the highest international load factor, indicating a strong appetite for air cargo services.
North American airlines posted a 1.3% increase in international demand in October compared to the previous year, the second month of growth in 10 months. This strong performance compared to the rest of the industry was driven by the Asia-North America routes, reflecting growing e-commerce demand for products manufactured in Asia and smaller capacity decreases than in other regions. The region’s domestic market slowed slightly since September, but remained solid. International capacity decreased 16.6%.
European operators reported a decrease in demand of 11.9% in October compared to the previous year. This was an improvement over the 15.6% drop in September 2020. Air cargo in the region has been largely unaffected by the resurgence of the COVID-19 virus. International capacity was down 28%, an improvement from the 32.6% drop in the previous month.
Middle Eastern carriers reported a 1.9% decline in international cargo volumes year-on-year in October, unchanged from September. However, the pace of recovery in October was slower than in September with a month-on-month demand, improving 6.0% and 2.5% respectively. The weaker performance is due to lower demand on the Africa and Middle East trade routes. International capacity decreased 22.7%.
Latin American carriers reported a 12.5% decrease in international cargo volumes in October compared to the previous year. This was a significant improvement over the 22.2% drop in September 2020. The month-over-month pace of recovery was the strongest of all regions in October, with demand increasing 4%. The region’s better year-on-year performance can be attributed in part to weak growth in the same period last year. However, improved operating conditions in some key markets, including Brazil, and the recovery of cargo capacity also contributed. International capacity decreased 29.1% compared to 32.1% in September.
African airlines saw demand rise 2.8% year-on-year in October. This was less than the 12.1% growth in September. Despite this, the region still registered the largest increase in international demand. The slight weakening in performance can be attributed to a slowdown in the Asia-Africa market, where demand decelerated by 19 percentage points year-on-year. International capacity decreased 20.8%.
