IATA: Mixed signals as growth makes a return

Cargo demand grew in August for the first time in 19 months, the International Air Transport Association (IATA) reports.

Demand measured in cargo tonne kilometres was up 1.2% in August with economic data painting a mixed picture.

The manufacturing output Purchasing Managers Index (PMI) was 49.4 and the export orders PMI was 47, both below the critical 50 mark, an improvement over July, indicating a slower decline in global manufacturing production and exports.

Global cross-border trade contracted for a fourth month in a row in July, down 3.2%, reflecting the cooling demand environment and general macroeconomic conditions.

Inflation was mixed with increasing consumer prices in the US, Europe and Japan seeing falling consumer and producer prices, and consumer prices rising in China.

Capacity measured in available cargo tonne kilometres was up 12.2% on last August due to belly capacity increasing 30% as airlines ramped up operations for the northern summer travel season.

Willie Walsh, Director General of IATA, says, “Air cargo demand grew by 1.5% over the previous August. This is the first year-on-year growth in 19 months, so it is certainly welcome news. But it is off a low 2022 base and market signals are mixed. Looking ahead, while many uncertainties remain, we can take some optimism from PMI data moving towards positive territory. This is particularly significant as we head into air cargo’s traditional peak year-end season.”

Volumes for Asia-Pacific airlines were up 4.9% with growth on the Europe - Asia and Middle East - Asia trade lanes and improved intra-Asia performance.

North America was down 1.2%, an improvement on the 5.4% decline in July due to improvements on the North America – Europe and Asia – North America trade lanes, declining 2.9% and 4.2% respectively in August.

Europe was 0.2% below August last year helped by trade with Asia and a small increase on the Middle East – Europe trade lane, which was up 0.4%.

The Middle East was up 1.4% year-on-year compared to a 0.1% contraction in July, with the Middle East – Asia lane going upwards.

Latin America had the strongest performance in August, up 6% compared to the 0.5% increase in July.

Africa was the weakest performer, down 4.7% year-on-year with IATA highlighting Africa-Asia routes declining by 1.1%.