Page 10 - AAA JUNE - JULY 2022 Online Magazine

CARGO

orders; a shift in consumer spending toward
services in a relaxed pandemic environment;
high inflation; and congestion at airport cargo
terminals.
On an Upward Curve
The largest airline trade association said it
expects cargo to continue supporting the
industry’s performance. Volumes are projected
to rise this year even as cargo yield moderates
with the additional belly capacity from pas-
senger aircraft returning to service. “Airlines
are resilient. People are flying in ever greater
numbers. And cargo is performing well against
a backdrop of growing economic uncertainty.
… It is a time for optimism, even if there are
still challenges on costs, particularly fuel, and
some lingering restrictions in a few key mar-
kets,” said IATA Director General Willie Walsh.
Cargo revenues are expected to tally US$191
billion, a 6.4 per cent reduction from 2021’s
peak of US$204 billion and nearly twice the
US$100 billion achieved in 2019. Airfreight will
account for 24.4 per cent of total passenger
and cargo airline sales, IATA estimated. With
passenger traffic decimated by the pandemic,
cargo represented 36.2 per cent and 40.3 per
cent of airline revenues in 2020 and 2021,
respectively, compared to about 12 per cent in
the preceding four years. Airlines are projected
to carry more than 75 million tons of cargo this
year, which would represent a record high. But
growth has flattened on a seasonally adjusted
basis — albeit at near-record high volumes.

Nonetheless, IATA projects air cargo volumes
to be 11.7 per cent above the pre-pandemic
SHAPING UP cent versus 2019. ATA estimates global GDP
level following red-hot 2021 growth of 6.9 per

is now poised to grow about 3.4 per cent this
year, down from 4 per cent to 4.5 per cent
prior to Russia’s invasion of Ukraine. The U.S.
and European Union economies contracted
by a fraction of a point in the first quarter and
CARGO CONTINUES TO SUPPORT AIRLINE China’s second quarter output will be heavily
INDUSTRY’S PERFORMANCE impacted by the extensive lockdowns imposed
in April and May. Prior to the invasion of Ukraine,
about 19 per cent of international cargo ship-
Jay Menon ments transited Russian airspace. Russia’s ban
on overflights in response to 40 nations closing
Air cargo business is slowing amid global macroeconomic pres- their airspace to Russian aircraft means higher
sures but 2022 is still shaping up as one of the industry’s strongest fuel costs for carriers that now must detour
years ever with cargo revenues nearly double those before the around Russia on Asia-Europe and Asia-North
pandemic, the International Air Transport Association (IATA) said. America routes. The extra transit time and need
Several factors are acting as a drag on international goods move- to carry extra fuel has reduced aircraft utiliza-
ment by air: delayed factory production due to heavy-handed tion for cargo by about 20 per cent, according
COVID lockdowns in China; the Ukraine war; a drop in new export to aviation experts.

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