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Air Cargo Shows Slight Pickup In May Amid Continuing Capacity Crunch
Global demand measured in cargo tonne kilometres fell by 20.3 per cent in May (minus 21.5 per cent for international operations) compared to the previous year.
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The International Air Transport Association (IATA) on Tuesday released data for global air freight markets in May showing a slight improvement in the air cargo market.
But capacity remains unable to meet demand as a result of the loss of belly cargo operations on passenger aircraft that have been parked.
Global demand measured in cargo tonne kilometres fell by 20.3 per cent in May (minus 21.5 per cent for international operations) compared to the previous year. That is an improvement from the 25.6 per cent year-on-year drop recorded in April.
Global capacity measured in available cargo tonne kilometres shrank by 34.7 per cent in May (minus 32.2 per cent for international operations) compared to the previous year, a slight deceleration from the 41.6 per cent year-on-year drop in April.
Belly capacity for international air cargo shrank by 66.4 per cent in May compared to the previous year due to the withdrawal of passenger services amid the Covid-19 crisis (up slightly from the 75.1 per cent year-on-year decline in April). This was partially offset by a 25.2 per cent increase in capacity through expanded use of freighter aircraft.
The cargo load factor rose 10.4 percentage points in May. This was a slight decrease from the 12.8 percentage point rise in April. However, the extent of the increase suggests that there is still pent-up demand for air cargo which cannot be met due to the continued grounding of many passenger flights.
Global export orders continue to fall but at a slower pace. The Purchasing Managers Index (PMI) tracking new manufacturing export orders improved from the trough seen in April despite remaining in contractionary territory.
Air cargo demand is down by over 20 per cent compared to 2019. And with most of the passenger fleet grounded, capacity was down 34.7 per cent, said IATA's Director General and CEO Alexandre de Juniac.
"The gap between demand and capacity shows the challenge in finding the space on the aircraft still flying to get goods to market. For that, the prospects for air cargo remain stronger than for the passenger business but the future is very uncertain," he said.
Economic activity is picking up from April lows as some economies unlock. But predicting the length and depth of the recession remains difficult, said de Juniac.
All regions suffered declines in May. Airlines in Europe and Latin America suffered the sharpest drops in year-on-year growth in total air freight volumes while airlines in the Asia Pacific and the Middle East experienced slightly less dramatic declines. Airlines in North America and Africa saw more moderate drops compared to the other regions.
Asia Pacific airlines saw demand for international air cargo fall by 21.3 per cent in May 2020 compared to the same period a year earlier. This was a solid improvement over the 25.2 per cent drop in April.
Seasonally adjusted freight volumes also rebounded slightly in May and have now reached 75 per cent of their pre-COVID-19 crisis levels. Shipments of personal protective equipment (PPE) are helping support airlines in the region. International capacity decreased by 31 per cent.