Air cargo traffic rose 9.9% last month compared to June 2019 , pushing 1H 2021 growth to 8%, its strongest first half performance since 2017
Underlying economic conditions and favorable supply chain dynamics remain highly supportive for the sector
The strong first-half performance looks set to continue
Global air cargo markets demonstrated resilience in June on the back of supportive economic conditions and improving business confidence in advanced economies, according to air transport groups.
The International Air Transport Association (IATA) said air cargo traffic rose 9.9% last month compared to June 2019 (before the pandemic struck) to push air cargo growth in the first half of this year to 8%, its strongest first half performance since 2017.
Regional variations in performance are significant, IATA figures showed. North American carriers contributed 5.9 percentage points to the 9.9% 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 remained constrained at 10.8% below June 2019 due to the ongoing grounding of passenger aircraft. Belly capacity was down 38.9% on June 2019 levels, partially offset by a 29.7% increase in dedicated freighter capacity.
Underlying economic conditions and favorable supply chain dynamics remain highly supportive for air cargo, IATA noted. These include a record low US inventory to sales ratio, meaning that businesses have to quickly refill their stocks, and typically use air cargo to do so.
Additionally, 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.
And 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% compared to 70% to 80% 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 8% 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,” said Willie Walsh, IATA’s director general.
“Importantly, the strong first-half performance looks set to continue,” he added.
Likewise, Association of Asia Pacific Airlines (AAPA) data showed that air cargo markets remained resilient in June, supported by improved business confidence in the advanced economies, in particular, the United States and Europe.
Accordingly, international air cargo demand grew by 25.7% year-on-year, with volumes matching the same month in 2019. Offered freight capacity saw an 11.7% year-on-year increase, leading to an 8.2 percentage point jump in the average international freight load factor to 73.3% for the month.
Subhas Menon, AAPA director general, said, “The already dire situation has recently been compounded by new COVID-19 infections across the region due to the Delta variant, with ongoing border restrictions holding back any meaningful restart in international travel markets. Air cargo traffic growth, supported by strong demand for both intermediate and consumer goods from the major advanced economies, remains the saving grace.”