IATA: Air cargo demand surged by 10.8% in December 2023

IATA: Air cargo demand surged 10.8% in December

IATA (the International Air Transport Association) has released data for global air freight markets showing that air cargo demand rebounded in 2023 with a particularly strong fourth quarter performance despite economic uncertainties.

Its figures show that full-year demand in 2023 reached a level just slightly below 2022 and 2019.

Last year, global full-year demand (measured in cargo tonne-kilometres) was down 1.9 per cent compared to 2022 – a decrease of 2.2 per cent for international operations.

Compared to 2019, it was down 3.6 per cent – a decrease of 3.8 per cent for international operations.

Meanwhile, capacity in 2023 (measured in available cargo tonne-kilometres) was 11.3 per cent above 2022 – an increase of 9.6 per cent for international operations.

Compared to pre-Covid 2019 levels, capacity was up 2.5 per cent – 0.0 per cent for international operations.

December 2023 saw an “exceptionally strong performance”, according to IATA. Global demand was 10.8 per cent above 2022 levels – an 11.5 per cent increase for international operations.

This, IATA said, was the strongest annual growth performance over the past two years, with global capacity at 13.6 per cent above 2022 levels – an increase of 14.1 per cent for international operations.

Willie Walsh, director general of IATA, said: “Despite political and economic challenges, 2023 saw air cargo markets regain ground lost in 2022 after the extraordinary Covid peak in 2021.

“Although full-year demand was shy of pre-Covid levels by 3.6 per cent, the significant strengthening in the last quarter is a sign that markets are stabilising 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.”

The association said that some indicators to note are that global cross-border trade recorded growth for the third consecutive month in October, reversing its previous downward trend, and December inflation in both the US and EU as measured by the corresponding consumer price indices (CPI) stayed below 3.5 per cent year-on-year.

China’s CPI, however, indicated deflation for the third consecutive month, raising concerns of an economic slowdown.

In addition, both the manufacturing output and new export order purchasing managers indexes (PMIs), two leading indicators of global air cargo demand, continued to hover below the 50-mark in December – usual markers for contraction.

In November and December last year, air cargo experienced a modest rise in demand and yields due to disruptions in the Red Sea, according to IATA’s analysis.

When comparing data for the week commencing 4 November and the week ending 9 December, the association found a 1 per cent increase in global air cargo demand, coupled with a 5 per cent rise in yields. And in the Asia-Pacific region, demand grew by 2 per cent and yields by 6 per cent.

Meanwhile, IATA’s figures also showed a 1 per cent increase in demand between China and the rest of the world, and an 11 per cent increase in yields.

Europe’s demand remained steady, but yields increased by 3 per cent – and in the Middle East, demand was constant with a 4 per cent rise in yields.