Page 15 - AAA MAY / JULY 2024 Digital Magazine | GBP

Return to Normalcy

Air cargo demand continues to be on the rise, but the sector

looks likely to face headwinds in the near future. Meanwhile,

passenger to freight (P2F) conversions have cooled down

By Arun Sivasankaran

lobal air cargo markets data pre-covid norms. According to upwards in May across all
for May this year, released Jonathan McDonald, Manager, regions. The sector benefitted
G by the International Air Classic & Cargo aircraft at from trade growth, booming
Transport Association (IATA), aviation intelligence and advi- e-commerce and capacity con-
show continuing strong annual sory company IBA, restricted straints on maritime shipping.
growth in demand, but average feedstock availability is likely The outlook remains largely pos-
air cargo yields are expected to to constrain future conversion itive with purchasing managers
soften around 17 % Year-over- activity. showing expectations for future
Year (YoY) this year because of growth.”
increased available capacity and Healthy Outlook
subdued demand. Walsh however sees some
According to IATA, total demand potential headwinds. “Some
Freight demand outstripped in May this year, measured in dampening, however, could
capacity from the 2020-2022 cargo tonne-kilometres (CTKs), come as the US imposes stricter
period, and cargo yields jumped by 14.7% compared conditions on e-commerce
increased by 104 % of pre-pan- to the same month last year, deliveries from China. Increased
demic levels by the end of 2022. making it the sixth consecutive costs and transit times for ship-
With belly capacity returning as month of double-digit year-on- ments under $800 may deter US
passenger air traffic surpasses year growth. The increase was consumers and pose significant
pre-pandemic levels, the global even more pronounced at 15.5% challenges for growth on the
freighter fleet has been decreas- for international operations. Asia-North America trade lane—
ing in terms of the percentage of Capacity, measured in available the world’s biggest,” he says.
active aircraft. The freighter fleet cargo tonne-kilometres (ACTKs),
active currently is lower than in also increased by 6.7%, with Africa and the Asia Pacific
the pre-pandemic days. international operations alone were the strongest performing
registering a 10.2% spike. regions, with air cargo carriers in
Freighter conversion activity, Africa registering an 8.4% year-
which spiked during the pan- Willie Walsh, IATA Director on-year demand. Demand along
demic because of the need for General, is optimistic about the the Africa–Asia market went up
cargo capacity and hit a peak in prospects of the sector. “Air 40.6% compared to May last
2023, is settling back down to cargo demand moved sharply year. the strongest performance
of all trade lanes. Asia-Pacific
airlines saw 17.8% growth, with
the Europe-Asia, Within Asia and
Middle East-Asia trade lanes all
registering impressive increases
of 20.4%, 19.2% and 18.6%
respectively. Europe witnessed
a 17.2% year-on-year demand
growth, the third highest among
regions. The weakest perform-
ing region was North America,

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