The global representative body for the airline industry, the International Air Transport Association (IATA), has reported that the worldwide air cargo sector had a “soft” beginning to this year. In year-on-year (year-on-year) terms, total air cargo demand in January was down 14.9%, while international demand fell 16.2%. Total air cargo capacity, however, rose by 3.9%, the first year-on-year capacity increase since October last year. International capacity went up by 1.4%.

“With January cargo demand down 14.9% and capacity up 3.9%, 2023 began under some challenging business conditions,” pointed out IATA director-general Willie Walsh. “That was accompanied by persistent uncertainties, including war in Ukraine, inflation, and labour shortages. But there is solid ground for some cautious optimism about air cargo. Yields remain higher than pre-pandemic. And China’s much faster than expected shift from its zero Covid policy is stabilising production conditions in air cargo’s largest source market. That will give a much-needed demand boost as companies increase their engagement with China.”

In terms of the overall trade environment, in December the global goods trade fell by 3%, and this was the second month in succession in which this trade had declined. But in January, the worldwide new export orders element of the Purchasing Managers Index (PMI) rose, for the first time since October last year; this was a leading indicator for air cargo demand. In China and the US, the PMI levels were close to the crucial mark of 50. And for the Group of Seven leading democratic economies, the consumer price index fell from 7.4% in November last year to 6.7% in January.

The region that performed the best in January was Latin America, which saw air cargo demand increase, year-on-year, by 4.6%. All other regions recorded year-on-year decreases. The smallest decrease, 8.7%, was recorded in North America, followed by Africa (a decline of 9.5%). But while the figure for North America was a slight deterioration over December’s year-on-year fall of 8.5%, Africa’s January performance was an improvement over its December result, which had been a year-on-year decrease of 10%.

The Middle East region saw an 11.8% drop in January, year-on-year, but as with Africa, this was an improvement in its equivalent performance in December, which had seen a fall of 14.4%. Year-on-year, the Asia-Pacific was down 19% in January. Again, this was a better result than in December, when it had been down 21.2%.

The worst performing region was Europe, with a drop of 20.4% in January, year-on-year, and also a deterioration in comparison to its equivalent figure for December, which had been a fall of 19.4%. “Airlines in the region continue to be most affected by the war in Ukraine,” noted IATA.