IATA: Soft start to 2023 for air cargo industry

Air cargo had a soft start to 2023, as January markets showed declining demand. Industry cargo tonne-kilometers (CTKs) fell 14.9% compared with January 2022, and 16.2% for international operations, according to figures released Tuesday from the International Air Transport Association (IATA). Capacity, measured in available CTKs (ACTK), was up 3.9% year over year, the first YoY capacity growth since October 2022. International capacity increased 1.4% YoY. “The uptick in ACTKs reflects the strong recovery of belly capacity in passenger airline markets offsetting a decline [in] international capacity offered by dedicated freighters,” IATA said in the release. Export orders are growing for major economies, with Purchasing Managers Index (PMI) levels increasing in January for the first time since October 2022. PMI levels are close to the 50 mark in the U.S. and China, indicating that demand for manufactured goods is stabilizing in those two economies, according to IATA. IATA also pointed to other important factors in the operating environment, including global goods trade decreasing by 3% in December, the second consecutive monthly decline. The Consumer Price Index for G7 countries fell to 6.7% in January from 7.4% in November , and inflation in producer prices dropped to 9.6% in December. “There is solid ground for some cautious optimism about air cargo,” Willie Walsh, IATA’s director general , said in the release. “Yields remain higher than pre-pandemic. And China’s much-faster-than-expected shift from its zero-COVID policy is stabilizing production conditions in air cargo’s largest source market.” Asia-Pacific Asia-Pacific airlines saw air cargo volumes decrease 19% in January YoY, improving from a 21.2% YoY drop in December 2022. The region’s available capacity in January rose 8.8% YoY. Airlines in the region were affected by lower levels of trade and manufacturing activity as well as supply chain disruptions due to residual effects from COVID-19 restrictions imposed by China. The Lunar New Year also impacted cargo volumes. The region had a load factor level of 45.2%, down 15.5% YoY from January 2022. North America North American carriers saw an 8.7% YoY drop in January cargo volumes, declining from 8.5% in December 2022. Capacity increased 2.3% YoY for the region. The region had a load factor of 42.3%, down 5.1% YoY, and had a 28.1% world share in the industry. Europe European carriers had the largest regional decline with a 20.4% YoY drop in cargo volumes, decreasing from 19.4% in December 2022. Capacity increased 9.6% YoY. The region continues to feel the effects of the war in Ukraine , IATA said. Europe saw its load factor level decrease 1.8 percentage points to 54.1%, a 7.5% YoY decline. Middle East Middle Eastern carriers saw an 11.8% YoY decrease in cargo volumes in January, improving from a 14.4% YoY decline in December 2022. Capacity grew 9.6% YoY. The region’s load factor level decreased 4.3 percentage points to 41.1%, a 10% YoY decline. Latin America Meanwhile, Latin American carriers saw the only regional increase, with cargo volumes growing by 4.6% YoY, improving from zero growth in December 2022. Capacity increased 34.4% YoY from January 2022 and load factor level dropped 9.3% to 32.5%. Africa African airlines saw a 9.5% YoY decrease in cargo volumes, improving from 10% the previous month. Capacity dropped 1.8% YoY, while load factor level fell 3.8% to 43.9%.

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