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(01/02/24)
 IATA’s latest global air freight
market data shows that demand rebounded in 2023 with a
particularly strong fourth quarter performance despite economic
uncertainties. Full-year demand reached a level just slightly
below 2022 and 2019.

Global full-year demand in
2023, measured in cargo tonne-kilometers (CTK), was down 1.9%
compared to 2022 (-2.2% for international operations) and down 3.6% (-3.8 for international operations)
when compared to 2019.

Capacity in 2023, measured in available cargo tonne-kilometers
(ACTK), was 11.3% above 2022 (+9.6% for international operations)
and 2.5% (0.0% for international operations) compared to 2019.

December 2023 saw an exceptionally strong
performance with global demand 10.8% above 2022 levels (+11.5% for
international operations). Global capacity was 13.6% above 2022 levels (+14.1% for
international operations).

UPS Boeing 747-8F N607UP at HKIA. Picture by Steven Howard of TravelNewsAsia.com

Some indicators to note include:

– Global cross-border trade recorded growth for
the third consecutive month in October, reversing its previous
downward trend;

– December inflation in both the United States and the
EU as measured by the corresponding Consumer Price Indices (CPI)
stayed below 3.5% year-on-year. China’s CPI, however, indicated
deflation for the third consecutive month, raising concerns of an
economic slowdown;

– Both the manufacturing output and new export
order Purchasing Managers Indexes (PMIs) continued to hover below the
50-mark in December, usual markers for contraction.

“Despite political and economic challenges, 2023
saw air cargo markets regain ground lost in 2022 after the
extraordinary COVID peak in 2021,” said Willie Walsh, IATA’s Director General.
“Although full year demand was shy of pre-COVID
levels by 3.6%, the significant strengthening in the last quarter
is a sign that markets are stabilizing towards more normal demand
patterns. That puts the industry on very solid ground for success
in 2024. But with continued, and in some cases intensifying,
instability in geopolitics and economic forces, little should be
taken for granted in the months ahead.”

Asia-Pacific airlines posted a 0.9% increase in demand
in 2023 compared to 2022 (-1.4% for international operations) and
a capacity increase of 28.5% (+16.6% for international
operations). In December, airlines in the region recorded the best
performance of all regions, posting an 18.5% increase in demand
(+15.4% for international operations) compared to 2022. Capacity
increased 31.1% (+22.9% for international operations) during the
same period.

North American carriers reported the
worst year-on-year performance of all regions, with a 5.7%
decrease in demand in 2023 compared to 2022 (-4.3% for
international operations) and a capacity increase of 0.3% (+2.7%
for international operations). In December airlines in the region
reported a 2% decrease in demand (+5.9% international
operations), compared to 2022. Capacity increased 2.4% (+8.5% for
international operations) during the same period.

European carriers posted a 3.9% decrease in demand in 2023
compared to 2022 (-4.1% for international operations). During the
same period, airlines posted a capacity increase of 4.5% for both
global and international operations. In December, airlines in the
region posted an 8.6% increase in demand (+8.7% for international
operations) compared to 2022. Capacity increased 7.4% (+7.5% for
international operations) during the same period. Airlines in the
region continued to be most affected by the war in Ukraine.

Middle Eastern carriers reported an increase in demand
of 1.6% for global and international demand in 2023 compared to
2022 and an increase in capacity of 13.5% (+13.6% for
international operations). In December airlines in the region
posted an 18.3% increase in demand for both global and international operations compared to 2022. Capacity increased
17.7% (+17.8% for international operations) during the same
period.

Latin American carriers posted the
strongest year-on-year performance of all regions, with a 2%
increase in demand in 2023 compared to 2022 (+1.9% for
international operations). During the same period, airlines posted
a capacity increase of 13.2% (+16.9% for international
operations). In December airlines in the region posted growth in
demand of 6.4% (+6.3% for international operations) compared to
2021. Capacity grew 3.5% (+4.2% for international operations)
during the same period.

African airlines reported
a decrease in demand of 1.8% (-2.0% for international demand) in
2023 compared to 2022 and an increase in capacity of 5.6% (+5%
for international operations). In December airlines in the region
posted the weakest performance of all with a 1.2% decrease in
demand (-1.4% for international operations) compared to 2021.
Capacity grew 7.4% (+6.8% for international operations) during the
same period.

Red Sea Disruption

In
November and December air cargo experienced a modest rise in
demand and yields due to disruptions in the Red Sea. The
following was observed when comparing data for the week commencing
4 November 2023 and the week ending 9 December 2023:

– 1% increase in global air cargo demand coupled with a 5%
rise in yields;

– In the Asia-Pacific region, demand grew
by 2% and yields by 6%;

– 1% increase in demand between
China and the rest of the world and an 11% increase in yields;

– Europe’s demand remained steady, but yields increased by 3%;

– In the Middle East, demand was constant with a 4% rise in
yields; and

– Data for the last half of December showed
a normalization of demand and yields.

“The recent
disruption to maritime routes in the Red Sea has seen some
shippers pivot to air cargo. The increased demand saw a spike in
air cargo yields on related trade lanes. A similar spike is
expected in January as disruptions intensified. While not all
cargo is suitable for air transport, it is a vital option for some
of the most urgent shipments in extraordinary circumstances. And
that is critical to the continuity of the global economy,” said
Walsh.

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