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IATA: Demand falls at reduced rate in June

Global cargo demand has contracted at its lowest rate since early 2022, according to data from the International Air Transport Association (IATA).

IATA reports the cargo demand measured in cargo tonne kilometres was down 3.4% year-on-year in June, the smallest fall since February last year, putting demand 2.4% below 2019.

For the first half of the year, demand is down 8.1% compared the same period last year.

Capacity measured in available cargo tonne kilometres was up 9.7% compared June last year, rising at a lower rate than the double-digit rates recorded in March and May, reflecting capacity adjustments airlines are making due to demand.

In June, capacity was 3.7% above pre-pandemic levels and the first half of this year was 9.9% above last year.

Global cross-border trade decreased by 2.4% in May due to cooling demand and challenging macroeconomic conditions.

The difference between the annual growth rates of air cargo and global goods trade narrowed to -2.6 percentage points, which suggests air cargo continues to suffer more than container cargo from the slowdown in global trade.

In June, both the manufacturing output Purchasing Managers Index (PMI) and new export orders PMI were below the 50 mark, indicating a decline in global manufacturing production and exports.

Willie Walsh, Director General of IATA, says, “We remain hopeful that the difficult trading conditions for air cargo will moderate as inflation eases in major economies. This, in turn, could encourage the central banks to loosen the money supply, which could stimulate greater economic activity.”

Airlines in Asia-Pacific saw volumes decrease 3.6% in June compared to 2.5% in May due to weakness on routes within Asia but Asia- North America saw improvements.

North America was the weakest performer again, down 6.5%, which was better than the 8.6% contraction in May, helped by improvements on the Europe-North America lane.

European carriers improved with a 2.8% fall compared to 6.6% in May, helped by strong trade with North America.

Middle Eastern carriers registered a year-on-year increase of 0.5% Asia and European routes seeing annual growth.

Latin America was the strongest performer again, up 7.3% in June, which was better than May when volumes were up 3.8% year-on-year.

African airlines posted a bigger decline than May, with a year-on-year decline of 2.8% compared to 1.9%.