The October 2022 global air cargo markets data that was released recently by the International Air Transport Association (IATA), showed that headwinds continued to affect air cargo demand.
It stated that global demand, measured in cargo tonne-kilometers (CTKs), fell 13.6 per cent compared to October 2021 that was -13.5 per cent for international operations.Capacity was 0.6 per cent below October 2021. This was the first year-on-year contraction since April 2022, however, month-on-month capacity increased by 2.4 per cent in preparation for the year-end peak season. International cargo capacity grew 2.4 per cent compared to October 2021.
IATA said several factors in the operating environment should be noted, which include the fact that new export orders, a leading indicator of cargo demand, are shrinking in all markets except China and South Korea, which registered slightly higher new export orders in October.
The latest global goods trade figures showed a 5.6 per cent expansion in September, a positive sign for the global economy. This is expected to primarily benefit maritime cargo, with a slight boost to air cargo as well.
The US dollar has seen a sharp appreciation, with the broad real effective exchange rate in September 2022 reaching the highest level since 1986. A strong dollar affects air cargo. As many costs are denominated in dollars, the currency’s appreciation adds another layer of cost on top of high inflation and high jet fuel prices and that the Consumer Price Index increased slightly in G7 countries in October and remains at a decades’ high level of 7.8 per cent. Inflation in producer (input) prices reduced by 0.5 percentage points to 13.3 per cent in September.
IATA’s Director General, Willie Walsh, said: “Air cargo continues to demonstrate resilience as headwinds persist. Cargo demand in October — while tracking below the exceptional performance of October 2021– saw a 3.5 per cent increase in demand compared to September. This indicates that the year-end will still bring a traditional peak-season boost despite economic uncertainties. But as 2022 closes out it appears that the current economic uncertainties will follow into the New Year and need continued close monitoring.”
