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Compared to pre-Covid levels in May 2019, global demand in May 2021 was up 9.4%, the 13th consecutive month of improvement
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Air cargo outperformed global goods trade for the fifth consecutive month
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Improved price competitiveness compared to sea shipping should continue to make air cargo a bright spot for airlines
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Airlines in all regions except for Latin America supported the demand growth
Global air cargo demand continued its strong growth trend in May, supported by favorable trade and manufacturing conditions and supply chain dynamics, according to the latest International Air Transport Association (IATA) data.
Compared to pre-Covid levels in May 2019, global demand in May was up 9.4% as measured in cargo tonne-kilometers. Seasonally adjusted demand rose by 0.4% month-on-month in May, the 13th consecutive month of improvement.
The pace of growth slowed slightly in May compared to April’s 11.3% increase against April 2019. Notwithstanding, air cargo outperformed global goods trade for the fifth consecutive month.
Capacity remains constrained at 9.7% below pre-COVID-19 levels (May 2019) due to the ongoing grounding of passenger aircraft. Seasonally adjusted capacity rose 0.8% month-on-month in May, the fourth consecutive month of improvement indicating that the capacity crunch is slowly unwinding.
Underlying economic conditions and favorable supply chain dynamics remain supportive for air cargo. This as global trade rose 0.5% in April and 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.
Further, the cost-competitiveness of air cargo relative to that of container shipping has improved. Pre-crisis, the average price of air cargo was 12 times more expensive than sea shipping. In May 2021 it was six times more expensive.
“Propelled by strong economic growth in trade and manufacturing, demand for air cargo is 9.4% above pre-crisis levels. As economies unlock, we can expect a shift in consumption from goods to services. This could slow growth for cargo in general, but improved competitiveness compared to sea shipping should continue to make air cargo a bright spot for airlines while passenger demand struggles with continued border closures and travel restrictions,” said Willie Walsh, IATA’s director general.
In terms of region, North American carriers contributed 4.6 percentage points to the 9.4% growth rate in May. They posted a 25.5% increase in international demand in May 2021 compared to May 2019. This was on par with April’s performance (25.4%) and the strongest of all regions.
Airlines in all other regions except for Latin America also supported the growth.
Asia-Pacific airlines saw demand for international air cargo increase 5.3% in May 2021 compared to the same month in 2019. This was a decrease compared to the previous month (5.9%) due to a slight slowdown in growth in several large trade routes such as within Asia.
European carriers posted a 5.7% increase in demand in May 2021 compared to the same month in 2019, a decrease compared to the previous month (11.5%) due to a slight slowdown in growth on key trade routes.
Middle Eastern carriers posted a 14.1% rise in international cargo volumes in May 2021 versus May 2019, a slight decrease compared to the previous month (15.6%). Seasonally adjusted volumes remain on a robust upward trend.
Latin American carriers reported a decline of 14% in international cargo volumes in May compared to the 2019 period. This was the worst performance of all regions, but a significant improvement compared to the previous month, which saw a 32.3% drop in demand.
African airlines’ cargo demand in May increased 24.5% compared to the same month in 2019, a decrease in performance compared to the previous month (34.0%) due to a slowdown in trade flows between Africa and Asia.
Photo by Karl Köhler on Unsplash
