Global air freight market sees tight capacity as travelers stay home

Global air cargo demand was stable in July but remained stuck at lower levels than 2019, as the industry continues to be mired in the effects of the coronavirus pandemic, according to the latest numbers from trade group The International Air Transport Association (IATA).

A major factor delaying the sector’s further recovery is the lingering trend of consumer concerns about boarding planes where they would sit in close contact to other travelers, a practice that has been banned in other settings such as retail stores, restaurants, sporting events, and classrooms.

Because of that trend, air freight markets are seeing capacity constraints from the loss of available “belly cargo space” as passenger aircraft remain parked, Geneva-based IATA said. Shackled by that constraint, the sector’s month-to-month improvement is happening at a slower pace than some of the traditional leading indicators would suggest.

“Economic indicators are improving, but we have not yet seen that fully reflected in growing air cargo shipments,” Alexandre de Juniac, IATA's director general and CEO, said in a release. “That said, air cargo is much stronger than the passenger side of the business. And one of our biggest challenges remains accommodating demand with severely reduced capacity. If borders remain closed, travel curtailed and passenger fleets grounded, the ability of air cargo to keep the global economy moving will be challenged.”

By the numbers, global demand fell by 13.5% in July compared to the same month last year, a modest improvement from the 16.6% year-on-year drop recorded in June as measured in cargo tonne-kilometers (CTKs), IATA said.

However, global capacity shrank by 31.2% in July for a small improvement from the 33.4% year-on-year drop in June as measured in available cargo tonne-kilometers (ACTKs). Much of that lost capacity came from idled passenger jets; belly capacity for international air cargo shrank by 70.5% in July compared to the previous year, owing to the withdrawal of passenger services amid the Covid-19 pandemic. That loss was partially offset by a 28.8% increase in capacity through expanded use of freighter aircraft.

Global #aircargo demand in July was ?? 13.5% compared to 2019 & available capacity ??31.2%

Economic activity is increasing but with reduced capacity due to grounded pax fleets the ability of #aircargo to keep the global economy moving is compromised. ??https://t.co/KkHc2l9lhj pic.twitter.com/jJaewwzx3W

— IATA (@IATA) August 31, 2020