Global air cargo demand improved slightly in November, with seasonally-adjusted demand up 1.6 per cent over October, but still significantly down on 2019. Capacity remains constrained from the loss of available belly cargo space as passenger aircraft remain parked.
The International Air Transport Association (IATA) says data global demand, measured in cargo tonne-kilometers (CTKs), was -6.6 per cent below previous-year levels in November (-7.7 per cent for international operations). This was on par with the -6.2 per cent year-on-year drop in October.
IATA notes the year-on-year decline is skewed as November 2019 had a boost in demand from the waning US-China trade war.
Seasonally adjusted demand continued to improve, increasing 1.6 per cent month-on-month in November, a slight improvement over the monthly growth rate of 1.1 per cent in October. Current month-on-month gains indicate that seasonally adjusted demand will return to 2019 levels around March or April 2021, according to the industry association.
Global capacity, measured in available cargo tonne-kilometers (ACTKs), shrank by 20 per cent in November (-21.3 per cent for international operations) compared to the previous year. This is nearly three times larger than the contraction in demand. The capacity crunch is caused by a 53 per cent decrease in belly capacity which has only been partially offset by a 20 per cent increase in freighter capacity.
Strong regional variations continue with North American carriers reporting year-on-year gains in demand (+5.0 per cent), while all other regions remained in negative territory compared to a year earlier.
Economic conditions in November, normally the peak season for air cargo, remained positive, IATA says. The new export orders component of the manufacturing Purchasing Managers’ Index (PMI) remained in growth territory in both developed and emerging markets for the third month in a row after two years of indicating negative growth.
Retail sales for November were up by around 5.0 per cent over 2019 for both China and the US, propelled by e-commerce events like Black Friday and Singles Day.
“Air cargo demand is still down 6.6 per cent compared to the previous year, however, we are seeing continuing month-on-month improvements,” says Alexandre de Juniac, IATA’s director general and CEO. “Severe capacity constraints persist as large parts of the passenger fleet remain grounded. This will put pressure on the industry as it gears up to deliver vital COVID-19 vaccines.”
Asia-Pacific airlines reported a decline in year-on-year international demand of 9.5 per cent in November 2020 compared to the same month a year earlier. This was a 2.2 per cent improvement from the 11.7 per cent fall in October 2020. While international traffic within the region remains weak (down -19.6 per cent year-on-year in November), exports on the Asia-North America and Asia-Europe routes are strong, driven by demand for e-commerce and PPE. International capacity remained constrained in the region, down 25.3 per cent. However, this was an improvement over the 28.5 per cent fall the previous month, IATA notes.
North American carriers posted a 1.0 per cent increase in international demand in November compared to the previous year— just the third month of growth in 12 months. This stronger performance compared to the rest of the industry was driven by a less stringent capacity crunch compared to other regions, with international capacity only down -12.7 per cent in November. Strong traffic on the Asia-North America routes also contributed to the performance, reflecting rising e-commerce demand for products manufactured in Asia.
European carriers reported a decrease in international demand of -13.7 per cent in November compared to the previous year. This was a -2.7 per cent decline in performance compared to October 2020. Air cargo in the region has been significantly affected by the resurgence of the COVID-19 virus and the impact of lockdowns on consumer demand and business activity. Lack of capacity remains a challenge, as international capacity decreased -24.9 per cent in November.
Middle Eastern carriers reported a decline of -2.2 per cent in year-on-year international cargo volumes in November, a -1.1 per cent deterioration from October. The lack of international connectivity is hampering air cargo recovery in the region, however seasonally-adjusted demand remains on an upward trend. International capacity decreased by -18.6 per cent.
Latin American carriers reported a decline of -19.4 per cent in international cargo volumes in November compared to the previous year. This was a drop from the -12.2 per cent fall in October 2020. Air cargo in the region has been significantly affected by the resurgence of the COVID-19 virus and the impact of lockdowns on consumer demand and business activity. International capacity decreased -24.8 per cent in November, an improvement from the -28.9 per cent fall in October.
African airlines saw international demand fall by -1.7 per cent year-on-year in November, after three months of positive year-on-year growth. This is primarily driven by a soft performance on the Asia-Africa route, which was down -4.5 per cent year-on-year. International capacity decreased by -19.4 per cent.