DALLAS – The International Air Transport Association (IATA), responsible for regulating global commercial aviation, has published the results regarding air cargo demand for November 2022.
According to IATA, the demand in air cargo markets had softened as economic headwinds persist. Measured in cargo tonne-kilometers (CTKs), the global demand fell a considerable 13.7% compared to November 2021 and 14.2% if we only consider international operations.
Additionally, capacity was 1.9% below November 2021, being 2022 the second year-on-year in contraction since the start of the pandemic. Compared to pre-COVID-19, however, there was a 10.1% contraction in overall demand, though this one is smaller compared to post-pandemic years.
Accompanying the publication of these results, IATA’s Director General Willie Walsh stated: “Air cargo performance softened in November, the traditional peak season. Market signals are mixed. But shrinking export orders globally and China’s rising COVID cases are a cause for careful monitoring.”
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Contributing Factors to the Demand Shortage
According to IATA, an increased market share by maritime cargo, the appreciation of the US dollar or the sudden rise of the global Consumer Price Index (CPI) has had a significant impact on the decrease in air cargo demand at the end of the year, which should be the most engaging and profitable season for shipping due to the Thanksgiving and Christmas holidays.
However, there may have been additional factors long-term that may have been related to this shortage. Actually, we are comparing the November 2022 results to the 2020 and 2021 years, which showed the ever-best results in air cargo in aviation history.
These two years, marked by the COVID-19 pandemic spread and the worldwide lockdown opened to the world’s population a new method of purchasing and shipping goods to people’s homes via online stores, which prevented customers from stepping outside their houses. Amazon experienced the largest boost of the company that year, with US$386bn in 2020 and US$470bn in 2021.
This added to the rise in demand for every other online store and forced cargo airlines to perform structural changes and expansions to adapt to the brand-new market that opened during the pandemic.
Another significant factor contributing to this shortage is the ban from European and American airspace to all Russian airlines. This, believe it or not, has had an enormous impact on the market, as the world has lost the international cargo market covered by big airlines such as Volga-Dnepr (VI), Air Bridge Cargo (RU), and Aviastar-TU (4B), among many others.
Featured image: Misael Ocasio Hernandez/Airways