Home » Aviation, Breaking News » July air cargo demand stable but capacity gap remains—IATA

Global air freight traffic in July remained stable but below 2019 levels as severe lack of capacity weighed on airlines’ ability to meet demand, according to International Air Transport Association (IATA) data.

While there is some month-to-month improvement, it is at a slower pace due to the capacity constraint from the loss of available belly cargo space as passenger aircraft remain parked, noted IATA.

Global demand fell by 13.5% in July (-15.5% for international operations) compared to the previous year. This is a modest improvement from the 16.6% year-on-year drop recorded in June. Seasonally adjusted demand grew by 2.6% month-on-month in July.

Global capacity shrank by 31.2% in July (32.9% for international operations) compared to the previous year. This is a small improvement from the 33.4% year-on-year drop in June.

Belly capacity for international air cargo shrank by 70.5% in July compared to the previous year owing to the withdrawal of passenger services amid the COVID-19 pandemic. This was partially offset by a 28.8% increase in capacity through expanded use of freighter aircraft.

Economic activity continued to recover in July, reflected in the performance of the Purchasing Managers’ Index (PMI), an indicator of economic health in the manufacturing sector.

“Economic indicators are improving, but we have not yet seen that fully reflected in growing air cargo shipments. That said, air cargo is much stronger than the passenger side of the business. And one of our biggest challenges remains accommodating demand with severely reduced capacity,” said Alexandre de Juniac, IATA’s director general and CEO.

Regional performance

By region, Asia-Pacific airlines saw demand for international air cargo fall by 15.3% in July 2020 compared to the same period a year earlier. After a robust initial recovery in May, month-on-month seasonally adjusted demand growth has softened. International capacity decreased 32.0%.

North American carriers reported that international cargo demand fell 5.4% year-on-year in July. The stronger performance is due in part to strong demand on the Asia-North America route, reflecting e-commerce demand for products manufactured in Asia. International capacity decreased 30.9%.

European carriers reported a 22.4% annual drop in international cargo volumes in July. This was a slight improvement from June’s performance of -27.6%. Demand on most key trade lanes to / from the region remained weak. The large Europe-Asia market was down 20% year-on-year in July. International capacity decreased 37.4%.

Middle Eastern carriers reported a decline of 14.9% in year-on-year international cargo volumes in July, an improvement from the 19% fall in June. Seasonally adjusted demand grew 7.2% month-on-month in July–the strongest of all regions. International capacity decreased 27.1%, the most resilient of all regions.

Latin American carriers posted a 32.1% drop in year-on-year international demand in July, down from a 28.6% decline in June. International capacity decreased 44.5%. The drop in both demand and capacity was the most severe of all regions.

African airlines posted a contraction of 3.0% in July. This was down from a 3.8% increase in demand in June. The small Africa-Asia market continued to support the region’s performance. International capacity decreased 33.7%

Photo by Ghana Shyam Khadka on Unsplash

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