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Thu, 5 March 2020

Air Cargo Demand Down 3.3% in January 2020

IATA's global air freight data shows that demand, when measured in cargo tonne kilometers (CTKs), decreased by 3.3% in January 2020, compared to the same period in 2019.

Since January 2020 onwards, IATA has changed the terminology it uses from ‘Freight’ to ‘Cargo’ and the corresponding metrics have changed from FTK to CTK, AFTK to ACTK, and FLF to CLF. Individual airline data retain the FTK metric, however.

"January marked the tenth consecutive month of year-on-year declines in cargo volumes," said Alexandre de Juniac, IATA’s Director General and CEO. "The air cargo industry started the year on a weak footing. There was optimism that an easing of US-China trade tensions would give the sector a boost in 2020. But that has been overtaken by the COVID19 outbreak, which has severely disrupted global supply chains, although it did not have a major impact on January’s cargo performance. Tough times are ahead. The course of future events is unclear, but this is a sector that has proven its resilience time and again."

Cargo containers at Noi Bai International Airport in Hanoi, Vietnam. Picture by Steven Howard of TravelNewsAsia.com Click to enlarge.

Cargo capacity, measured in available cargo tonne kilometers (ACTKs), rose by 0.9% year-on-year in January 2020. Capacity growth has now outstripped demand growth for 21 consecutive months.

It is unlikely that the COVID19 outbreak had very much to do with January’s weak performance. Lunar New Year in 2020 was earlier than in 2019. This skewed 2020 numbers towards weakness as many Chinese manufacturers would be closed for the holiday period. February performance will give a better picture of how COVID19 is impacting global air cargo.

Airlines in Asia-Pacific and Europe suffered sharp declines in year-on-year growth in total air cargo volumes in January 2020, while North American and Middle East carriers experienced a more moderate decline. Latin America and Africa were the only regions to record growth in air freight demand compared to January 2019.

Asia-Pacific airlines saw demand for air cargo contract by 5.9% in January 2020, compared to the year-earlier period. This was the sharpest drop in freight demand of any region for the month. Capacity growth was flat. Seasonally-adjusted cargo demand rose slightly however, following the thawing of US-China trade relations. The impact from COVID19 is expected to affect February’s performance.

North American airlines saw demand decrease by 1.3% in January 2020, compared to the same period a year earlier. Capacity increased by 3.4%. Seasonally-adjusted cargo demand rose slightly however, amid a more supportive operating environment and following the thawing of US-China trade relations.

European airlines posted a 3.7% decrease in cargo demand in January 2020 compared to the same period a year earlier – more than double the 1.3%% drop in year-on-year demand in December. Seasonally-adjusted demand also dropped sharply, disrupting the positive trend that started mid-2019. Capacity decreased by 3.0% year-on-year.

Middle Eastern airlines’ cargo volumes decreased 1.4% in January 2020 compared to the year-ago period. Capacity increased by 2.9%. Against a backdrop of operational and geopolitical challenges facing some of the region’s key airlines, seasonally-adjusted freight volumes ticked down in January, but a modest upwards trend has been sustained. However, given the Middle East’s position connecting trade between China and the rest of the world, the region’s carriers have significant exposure to the impact of COVID19 in the period ahead.

Latin American airlines experienced an increase in freight demand in January 2020 of 1.4% compared to January 2019 –  reversing the 2.5% decrease in December. Seasonally-adjusted freight volumes in the region also ticked upwards, underpinned by new route connections, which is a positive development for the region’s carriers. Capacity increased by 2.4%year-on-year.

African carriers posted the fastest growth of any region for the 11th consecutive month in January 2020, with an increase in demand of 6.8% compared to the same period a year earlier. Growth on the smaller Africa-Asia trade lanes (up 12.4% in 2019) contributed to the positive performance. Capacity grew 5.9% year-on-year.

See latest Travel News, Interviews, Podcasts and other news regarding: IATA, Cargo, Freight.

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