October was another month that saw increased year-on-year (y-o-y) air cargo demand, the International Air Transport Association (IATA) has reported. (IATA is the global representative body for the airline industry.) Total global demand in October was up 3.8%, while international demand rose by 3.5%.
Total air cargo capacity in October increased by 13.1% y-o-y, with international capacity rising by 11.1%. These increases were largely driven by greater airliner belly hold capacity, resulting from the strong recovery of air passenger markets. For example, international belly hold capacity was up 30.5%, y-o-y.
Air cargo yields increased in both September and October, following 17 straight months of decline. The month-on-month increase from September to October was 2.6%. Cargo yields stayed significantly higher that their pre-Covid-19 pandemic levels.
“Demand for air cargo was up 3.8% in October. That marks three consecutive months of [y-o-y] growth, placing air cargo on course to end 2023 on a much stronger footing than it began the year,” highlighted IATA director-general Willie Walsh. “Recovering demand, slightly stronger yields and the uptick in trade are all good news. But with demand still 2.4% below pre-pandemic levels, and much uncertainty remaining over the trajectory of the global economy, optimism must be balanced with caution. Nonetheless, a continued strong peak year-end season will certainly help the sector to manage through whatever turns the global economy might take in 2024.”
Regarding the global economy, October saw a slowdown in economic activities. Outside the US, the Purchasing Managers’ Indices for manufacturing output and export orders remained below the key 50-point mark. But global trade did stop its decline and stabilised in September. Further, global cross-border trade, while below its 2022 high, was still more than 5% higher than its pre-pandemic levels. And Consumer Price Index inflation in the major advanced economies continued to come down, reaching 3% in the US and 4% in the European Union. But China did record deflation, for the second time this year.
Of the regions that IATA divided the world into, the one that saw the highest y-o-y increase in cargo demand in October was the Middle East, at 10.9%. Next came the Asia-Pacific (7.6%), then Latin America (4%), Africa (2.9%) and Europe (1%). North America recorded a decline in demand, of -1.8%, although this was an improvement on the y-o-y decline of -2.2% reported in September.
Regarding Africa, the October increase of 2.9% was “much improved”, stated IATA, over its September y-o-y figure of -0.1%. “Carriers in the region benefitted from the strongest annual growth since May (+16.7%). Capacity was 9.8% above October 2022 levels.”