… as air cargo demand remains weak in May
African airlines witnessed a drop of 2.4 per cent in air demand for May 2023, as the data released by the International Air Transport Association (IATA) for May 2023 global air cargo markets showed weak market conditions.
From the data global demand, measured in cargo tonne-kilometers (CTKs), fell by 5.2 per cent compared to May 2022 (-6.0% for international operations).
“Capacity, as measured by available cargo tonne-kilometers (ACTKs), rose 14.5 per cent compared to May 2022, primarily driven by belly capacity which increases as demand in the passenger business recovers. Capacity is now 5.9 per cent above May 2019 (pre-pandemic) levels,” IATA explained in a statement.
Among the key factors influencing demand according to the global airline body are: The global manufacturing Purchasing Managers Index (PMI) which indicates an annual contraction of 1.4 per cent in new export orders and a decrease of 5.2 per cent year-on-year in production PMI. This suggests a cooling in global manufacturing demand.
Global goods trade decreased by 0.8 per cent in April, due to macroeconomic challenges and supply chain constraints. Trading conditions appeared to favour maritime cargo as demand for container shipping contracted by 0.2 per cent while air cargo demand weakened by 6.3 per cent year-on-year.
The global supplier delivery time PMI increased to 54.5 in May, up from its low of 35 in October 2021, indicating shorter delivery times and some relief for supply chains. However, this is also a sign of weaker global goods trade demand.
IATA’s Director General, Willie Walsh, said: “Trading conditions for air cargo continue to be challenging with a 5.2 per cent fall in demand and several economic indicators pointing towards weakness.
“The second half of the year, however, should bring some improvements. As inflation moderates in many markets, it is widely expected that central bank rate hikes will taper. This should help stimulate economic activity with a positive impact on demand for air cargo.”
May Regional Performance
African airlines posted a 2.4 per cent decrease in demand compared to May 2022. This was a decline in performance compared to the previous month (-0.9%). Notably, the growth on the Africa to Asia trade route slowed significantly in May from 18.5 per cent in April to 11.0 per cent, possibly due to the impact of the conflict in Sudan since mid-April. Capacity in May was up 9.2 per cent compared to the same month in 2022.
Asia-Pacific airlines saw their air cargo volumes decrease by 3.3 per cent in May 2023 compared to the same month in 2022. This was a decrease in performance compared to April (-0.3%), mainly due to the stronger annual contraction in international air cargo demand from -3.5 per cent in April to -6.4 per cent this month. Available capacity in the region increased by 38.3 per cent compared to May 2022 as more belly capacity came online from the passenger side of the business.
North American carriers saw the weakest performance of all regions for the third consecutive month with an 8.1 per cent decrease in cargo volumes in May 2023 compared to the same month in 2022. This was a slight improvement in performance compared to April (-12.4%). Notably, airlines in the region saw the third month of double-digit contractions in volumes on the North America-Europe trade lane (-0.3%). Capacity increased 1.2 per cent compared to May 2022.
European carriers experienced a 6.7 decrease in cargo volumes in May 2023, compared to the same month in 2022. This was an improvement in performance compared to April (-7.7%), in part due to the smaller annual contraction in international CTKs on the Europe-Middle East trade lane, from -4.7 per cent in April to -2.9 per cent in May. The decline in international cargo traffic on markets within Europe also improved from -16.2 per cent in April to -7.8 per cent this month (seasonally adjusted). Meanwhile, capacity increased 5.6 per cent in May 2023 compared to May 2022.
Middle Eastern carriers experienced a 3.1 per cent year-on-year decrease in cargo volumes in May 2023. This was a slight improvement in performance compared to the previous month (-6.7%). Capacity increased 15.6 per cent compared to May 2022.
Latin American carriers had the only positive performance in May 2023 posting a 3.6 per cent increase in cargo volumes compared to May 2022. This was an improvement in performance compared to April (1.6%). Capacity in May was up 14.7 per cent compared to the same month in 2022.
IATA statistics cover international and domestic scheduled air cargo for IATA member and non-member airlines.
Total cargo traffic market share by region of carriers in terms of CTK is: Asia-Pacific 32.4 per cent, Europe 21.8 per cent, North America 28.1 per cent, Middle East 13.0per cent, Latin America 2.7 per cent, and Africa 2.0 per cent.