IATA: Demand improves in challenging times

Cargo demand is improving against a backdrop of declining global trade and concerns about China’s economy, says the International Air Transport Association (IATA).

The data says demand measured in cargo tonne kilometres (CTK) was down 0.8% year-on-year, meaning demand is flat compared to 2022.

Capacity measured in available CTK (ACTK) was up 11.2% driven by the growth in belly capacity, which was up 29.3%.

In July, the manufacturing output Purchasing Managers Index (PMI) and new export orders PMI were both below 50, indicating declining global manufacturing production and exports.

Global cross-border trade contracted in June, down 2.5%, reflecting cooling demand and challenging macroeconomic conditions.

The global supplier delivery time PMI was 51.9 in July, signalling fewer supply chain delays, with all major economies except China posting PMIs above 50.

Willie Walsh, Director General of IATA says, “Many fundamental drivers of air cargo demand, such as trade volumes and export orders, remain weak or are deteriorating. And there are growing concerns over how China’s economy is developing. At the same time, we are seeing shorter delivery times, which is normally a sign of increasing economic activity. Amid these mixed signals, strengthening demand gives us good reason to be cautiously optimistic.”

Asia Pacific airlines were up 2.7% in July compared to a 3.3% fall in June, helped by growing trade with Europe, the Middle East and Africa.

North America was the weakest performer again, down 5.2% with transatlantic traffic declining 4.3%.

Europe declined 1.5% compared to 3.2% in June, with volumes being affected by weakness on transatlantic, Middle East-Europe and within Europe markets.

The Middle East was up 1.5% helped by demand on Middle East-Asia routes improving.

Latin America was up 0.4% compared to 2.2% growth registered in June.

Africa was up 2.9% in July with Africa-Asia growth mostly strongly at 10.3%.