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Global air cargo demand improves in November, capacity still tight

  • Air cargo demand is still down year-on-year, but continues to improve month-on-month
  • “Current month-on-month gains indicate that global demand will return to 2019 levels around March or April 2021,” says IATA
  • North American carriers reported year-on-year gains in demand, while all other regions remained in negative territory

Air freight volumes worldwide improved in November compared to October, but remain depressed compared to 2019, according to data from the International Air Transport Association (IATA).

Capacity remains constrained from the loss of available belly cargo space as passenger aircraft remain parked.

Global demand, measured in cargo tonne-kilometers, was 6.6% below previous-year levels in November. But the year-on-year decline is skewed as November 2019 had a boost in demand from the waning US-China trade war.

Month-on-month, November 2020 demand was on par with the 6.2% year-on-year drop in October. Seasonally adjusted demand continued to improve, increasing 1.6% month-on-month in November. This was a slight improvement over the monthly growth rate of 1.1% in October.

“Current month-on-month gains indicate that global demand will return to 2019 levels around March or April 2021,” said IATA.

Global capacity, measured in available cargo tonne-kilometers, shrank by 20% in November compared to the previous year. That is nearly three times larger than the contraction in demand. The capacity crunch is caused by a 53% decrease in belly capacity, only partially offset by a 20% increase in freighter capacity.

Strong regional variations continue with North American carriers reporting year-on-year gains in demand (+5%), while all other regions remained in negative territory compared to a year earlier.

Asia-Pacific airlines reported a decline in year-on-year international demand of 9.5% in November 2020 compared to the same month a year earlier. This was a 2.2% improvement from the 11.7% fall in October 2020.

While international traffic within the region remains weak (down 19.6% year-on-year in November), exports on the Asia-North America and Asia-Europe routes are strong, driven by demand for e-commerce and PPE. International capacity remained constrained in the region, down 25.3%. However, this was an improvement over the 28.5% fall the previous month.

Economic conditions in November, normally the peak season for air cargo, remained positive, noted IATA:

  • The new export orders component of the manufacturing Purchasing Managers’ Index (PMI) remained in growth territory in both developed and emerging markets for the third month in a row after two years of indicating negative growth
  • Retail sales for November were up by around 5% over 2019 for both China and the US, propelled by events like Black Friday and Singles Day

“Air cargo demand is still down 6.6% compared to the previous year, however we are seeing continuing month-on-month improvements. Severe capacity constraints persist as large parts of the passenger fleet remain grounded. This will put pressure on the industry as it gears up to deliver vital COVID-19 vaccines,” said Alexandre de Juniac, IATA’s director general and CEO.

Photo by Stefan Fluck on Unsplash

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