The International Air Transport Association (IATA) has delivered welcome news for the air cargo industry, reporting the strongest year-on-year growth in nearly two years for November 2023. Demand, measured in cargo tonne-kilometers (CTKs), soared 8.3% compared to the same month in 2022, marking a significant doubling from October's 3.8% increase. This positive trend represents the fourth consecutive month of growth for air cargo.
"It's shaping up to be an encouraging year-end for air cargo," declared Willie Walsh, IATA's Director General, acknowledging the ongoing economic concerns that continue to loom on the horizon.
While demand is on the rise, available capacity for cargo grew even faster at 13.7%, largely driven by the return of belly capacity on international passenger flights recovering from the pandemic's impact. However, demand still remains 2.5% below pre-pandemic levels (November 2019), while capacity has actually increased 4.1%.
Despite this slight lag, several key indicators suggest a potentially brighter future for air cargo. Both manufacturing output and new export order Purchasing Managers Indexes (PMIs), crucial leading indicators, dipped just below the 50 mark in November, hinting at a potential slowdown in the economic decline. Additionally, global cross-border trade has exhibited growth for the third consecutive month, reversing its previous downward trend.
Further optimism stems from softening inflation in major advanced economies, hovering around 3% year-on-year for the United States, Japan, and the EU in November. While China continues to show negative annual inflation growth for the second month in a row, this could potentially pave the way for increased consumer spending and a subsequent boost in air cargo demand.
Adding to the good news, air cargo yields (including surcharges) have taken off, experiencing a substantial 8.9% increase since October. This rise correlates with improving air cargo load factors in recent months and could be tied to the significant boom in e-commerce deliveries from China to Western markets.
Overall, the November data paints a picture of an air cargo market on the mend, showcasing resilient growth amidst ongoing economic uncertainties. As we move forward, it will be fascinating to see how these trends evolve and shape the future of this critical industry.
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