Poor capacity dampens air cargo in August: IATA

KUALA LUMPUR – The International Air Transport Association (IATA) has released data for global air freight markets in August, noting slow improvements due to lack of capacity.

IATA director-general and chief executive officer Alexandre de Juniac said air cargo demand improved by 1.8 percentage points in August compared to July.

“That’s still down 12.6 per cent on previous year levels and well below the 5.1 per cent improvement in the manufacturing Purchasing Managers Index.

“Improvement is being stalled by capacity constraints as large parts of the passenger fleet, which normally carries 50 per cent of all cargo, remain grounded,” he said in a statement today.

De Juniac noted that the peak season for air cargo will start in the coming weeks, but with severe capacity constraints shippers may look to alternatives such as sea and rail to keep the global economy moving.

On regional performance, IATA said airlines in Asia Pacific saw demand for international air cargo falling 18.3 per cent in August this year compared to the same period a year earlier.

After a robust initial recovery in May, it said month-on-month growth in seasonally-adjusted demand declined for the second consecutive month.

International capacity is particularly constrained in the region, down 35 per cent, he said.

North American carriers are experiencing its third consecutive month with a single-digit decline, IATA said, adding that demand fell four per cent compared to the previous year.

This steady performance was due in part to strong domestic and transpacific demand on the Asia-North America route, reflecting e-commerce demand for products manufactured in Asia.

“However, international capacity decreased 28.2 per cent,” it said, adding that demand for European carriers decreased by 19.3 per cent compared to the previous year.

IATA said demand on most key trade lanes to/from the region remained weak with the large Europe-Asia market down 18.6 per cent year-on-year in August, while international capacity decreased 33.5 per cent.

Middle Eastern carriers reported a decline of 6.8 per cent year-on-year for its international cargo volumes in August, a significant improvement from the 15.1 per cent fall in July.

“Regional airlines have aggressively added capacity in the last few months, improving from a 42 per cent fall at the trough in April, to a decline of 24.2 per cent in August, the most resilient of all regions.

“Demand on trade routes to and from Asia and North America also remained strong with demand down 3.3 per cent and up 2.3 per cent, respectively, year-on-year,” said IATA.

For Latin American carriers, it said the demand was steady at -26.1 per cent compared to the previous year, ending three consecutive months of deteriorating demand.

“Demand on trade routes between Latin America (particularly Central America) and North America have compensated for weakness on other routes.

“Capacity remains significantly constrained in the region with international capacity, decreasing 38.5 per cent in August, the largest fall of any region,” it said.

Meanwhile, African airlines saw demand increase by one per cent in August.

“Investment flows along the Africa-Asia route continue to drive the regional outcomes,” said IATA. 

This was the fourth consecutive month in which the region posted the strongest increase in international demand and the only instance of year-on-year growth among all regions in international volumes, it added. – Bernama, September 30, 2020