Middle Eastern cargo carriers saw a 0.5% increase in June

Global demand, measured in cargo tonne-kilometers (CTKs), fell 3.4% in June compared to June 2022 (-3.7% for international operations). For the half year, demand slid 8.1% compared to the January-June period of 2022 (-8.7% for international operations). However, demand in June was only 2.4% below June 2019 levels (pre-pandemic).

Capacity, as measured by available cargo tonne-kilometers (ACTKs), rose 9.7% compared to June 2022, which was a slower rate compared to the double-digit growth recorded between March and May. This reflects strategic capacity adjustments airlines are making amid a weakened demand environment. Capacity for the first half of 2023 was up 9.9% compared to a year ago. Capacity is now 3.7% above June 2019 (pre-pandemic) levels.

Key factors influencing air cargo demand include:

• In June, both manufacturing output Purchasing Managers Index or PMI (49.2) and new export orders PMI (47.1) were below the critical threshold represented by the 50 mark, indicating a decline in global manufacturing production and exports.
• Global cross-border trade decreased by 2.4% year-over-year in May, reflecting the cooling demand environment and challenging macroeconomic conditions. The difference between the annual growth rates of air cargo and the global goods trade narrowed to -2.6 percentage points in May, representing the smallest gap since January 2022. However, the gap still suggests that air cargo continues to suffer more than container cargo from the slowdown in global trade.

“We remain hopeful that the difficult trading conditions for air cargo will moderate as inflation eases in major economies. This, in turn, could encourage the central banks to loosen the money supply, which could stimulate greater economic activity,” said Willie Walsh, IATA’s director general.

June Regional Performance

Asia-Pacific airlines saw their air cargo volumes decrease by 3.6% in June 2023 compared to the same month in 2022. This was also a decline compared to May (-2.5%), mainly owing to weak demand on within-Asia markets, although the Asia-North America trade lane saw improved performance. Available capacity in the region increased by 24.4% compared to June 2022. Looking at the first half of 2023, cargo demand was down 6.5% versus the year-ago period against a 27.0% rise in capacity.

Middle Eastern carriers posted a 0.5% increase in cargo volumes in June 2023 versus a year ago. This was a strong turnaround from the 2.9% year-over-year decline registered in May. Capacity rose 11.1% for the month. Both Middle East-Asia and Middle East-Europe route areas saw annual growth. For the first half of the year, cargo demand was down 5.6% compared to a year ago, with an 11.2% hike in capacity.

African airlines posted a 2.8% decrease in demand compared to June 2022. This was a decline in performance compared to the previous month (-1.9%). Capacity in June was down 3.7% compared to the same month in 2022. For the first half of the year, cargo demand slowed by 4.4% while capacity climbed 1.6%.