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Economic conditions continue to support air cargo growth but are slightly weaker than in the previous months
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Supply chain disruptions have led to long supplier delivery times, spurring manufacturers to use the swifter air transport mode to recover time lost during production
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The inventory-to-sales ratio remains low ahead of the peak year-end retail events such as Christmas, a positive for air cargo as manufacturers turn to the air to rapidly meet demand
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Asia-Pacific airlines saw their international air cargo volumes increase 7.9% in October 2021 compared to the same month in 2019 and nearly double the growth of the previous month’s 4% expansion
Global air cargo market demand in October 2021 continued to be well above pre-crisis levels and the capacity constraints have eased slightly, according to the International Air Transport Association (IATA).
Global demand was up 9.4% in October this year compared to October 2019, and was higher by 10.4% for international operations, IATA said in a December 1 release.
Capacity constraints have eased slightly but remain 7.2% below October 2019, while capacity constraints for international operations were down 8.0%.
Economic conditions continue to support air cargo growth but are slightly weaker than in the previous months.
IATA noted that among the industry growth drivers are the supply chain disruptions and the resulting delivery delays, which have led to long supplier delivery times, spurring manufacturers to use the swifter air transport mode to recover time lost during the production process. The global Supplier Delivery Time Purchasing Managers’ Index (PMI) reached an all-time low of 34.8 in October; values below 50 are favorable for air cargo.
Additionally, relevant components of the October PMIs (new export orders and manufacturing output) have been in a gradual slowdown since May but remain in favorable territory.
The inventory-to-sales ratio remains low ahead of the peak year-end retail events such as Christmas, a positive for air cargo as manufacturers turn to the air to rapidly meet demand.
Global goods trade and industrial production remain above pre-crisis levels, and the cost-competitiveness of air cargo relative to that of container shipping remains favorable.
“October data reflected an overall positive outlook for air cargo. Supply chain congestion continued to push manufacturers towards the speed of air cargo. Demand was up 9.4% in October compared to pre-crisis levels. And capacity constraints were slowly resolving as more passenger travel meant more belly capacity for air cargo,” said Willie Walsh, IATA’s director general.
“The impact of government reactions to the Omicron variant is a concern. If it dampens travel demand, capacity issues will become more acute,” he said, calling on governments not to restrict travel but to ensure the integrity of supply chains and increase the distribution of vaccines.
By region, Asia-Pacific airlines saw their international air cargo volumes increase 7.9% in October 2021 compared to the same month in 2019 and nearly double the growth of the previous month’s 4% expansion. The improvement was partly driven by increased capacity on Europe-Asia routes as several important passenger routes reopened.
North American carriers posted an 18.8% increase in international cargo volumes in October 2021 compared to October 2019. This was on par with September’s performance (18.9%). Demand for faster shipping times and strong US retail sales are underpinning the North American performance.
European carriers saw an 8.6% increase in international cargo volumes in October 2021 compared to the same month in 2019, an improvement compared to the previous month (5.8%). Manufacturing activity, orders and long supplier delivery times remain favorable to air cargo demand.
Middle Eastern carriers experienced a 9.4% rise in international cargo volumes in October 2021 versus October 2019, a significant drop in performance compared to the previous month (18.4%). This was due to a deterioration in traffic on several key routes such as Middle East-Asia, and Middle East-North America.
Latin American carriers reported a decline of 6.6% in international cargo volumes in October compared to the 2019 period, which was the weakest performance of all regions, but an improvement compared to the previous month (a 17% fall).
African airlines saw international cargo volumes increase by 26.7% in October, a deterioration from the previous month (35%) but still the largest increase of all regions.
Photo by Marcus Zymmer on Unsplash
