The International Air Transport Association (IATA) has noted a severe capacity shortfall in air cargo performance for March as passenger planes remain grounded.

Global demand, measured in cargo tonne kilometers (CTKs), fell by 15.2% in March compared to the previous year and it dropped 15.8% for international markets, according to IATA. 

Global capacity, measured in available cargo tonne kilometers (ACTKs), also shrank by 22.7% in March compared to the previous year as a decline of 24.6% was recorded for international markets.

International markets account for 87% of air cargo.

IATA said belly capacity for international air cargo shrank by 43.7% in March compared to the previous year, although this was partially offset by a 6.2% increase in capacity through expanded use of freighter aircraft, including the use of idle passenger aircraft for all-cargo operations.

“At present, we don’t have enough capacity to meet the remaining demand for air cargo,” said Alexandre de Juniac, IATA’s director general and CEO.

He noted that volumes fell by over 15% in March compared to the previous year. But capacity plummeted by almost 23%.

“The gap must be addressed quickly because vital supplies must get to where they are needed most. For example, there is a doubling of demand for pharmaceutical shipments that are critical to this crisis,” he added.

The IATA chief also noted that with most of the passenger fleet sitting idle, airlines are doing their best to meet demand by adding freighter services, including adapting passenger aircraft to all-cargo activity — but mounting these special operations continues to face bureaucratic hurdles.

“Governments must cut the red tape needed to approve special flights and ensure safe and efficient facilitation of crew,” de Juniac added.

Government intervention needed

IATA said there are still too many examples of delays in getting charter permits issued, a lack of exemptions on COVID-19 testing for air cargo crew, and inadequate ground infrastructure to/from and within airport environments.

With this, IATA said air cargo needs to move efficiently throughout the entire supply chain to be effective and urges governments to cut the paperwork for charter operations; exempt cargo crew from quarantine rules that apply to the general population; and ensure there are adequate staff and facilities to process cargo efficiently

Slow recovery; recession to hit air cargo

Meanwhile, there is an immediate capacity shortage, and the collapsing economy is expected to further depress overall cargo volumes.

IATA said the short-term analysis shows that global manufacturing activity continued to contract in March as government-imposed lockdowns caused widespread disruptions.

“Looking at the prospects for the rest of 2020, the World Trade Organization forecast gives little indication of a quick recovery. The optimistic scenario is for a 13% fall in trade in 2020, while the pessimistic scenario sees a 32% fall in trade in 2020. This will deeply impact air cargo’s prospects,” IATA said.

It noted, however, that demand for pharmaceutical shipments are rising sharply as the world continues to battle the coronavirus disease. The segment is tracking at double previous-year volumes — excluding shipments of medical equipment.

“The capacity crunch will, unfortunately, be a temporary problem. The recession will likely hit air cargo at least as severely as it does the rest of the economy. To keep the supply chain moving to meet what demand might exist, airlines must be financially viable. The need for financial relief for airlines by whatever means possible remains urgent,” de Juniac noted.

Latin American airlines were the hardest hit 

Per region, airlines in Asia-Pacific recorded the most decline with demand for international air cargo dropping by 15.9% in March 2020, compared to the year-earlier period as international capacity decreased by 27.8%. 

North American carriers reported a decline in international demand of 13.3% annually in March. IATA said cargo volumes on the Europe-North America trade lane were affected the most (down 22% year-on-year) in March and international capacity decreased by 19%.

European carriers reported an 18.8% annual drop in international cargo volumes in March as intra-Europe demand declined by 32.6% year-on-year due to widespread shutdowns in the manufacturing sector across the region. The larger Europe-North America and Europe-Asia markets also recorded substantial declines this month. International capacity decreased by 27.6%.

Middle Eastern carriers reported a decline of 14.1% year-on-year as international capacity decreased by 20.4%. Latin American carriers posted the sharpest fall — a 19.3% year-on-year decline in international demand.

IATA said this was a significant deterioration compared to February (-0.5%). Declines were widespread but most severe for Central-South America with volumes down around 35% year-on-year. International capacity decreased by 37.6%.

Meanwhile, African airlines were less affected by disruptions in March. They saw year-on-year growth in international CTKs fall by 1.2% following the positive annual outcomes in January and February.

The Africa-Asia market was the only trade lane which continued to post growth in March, with volumes up almost 10% year-on-year. International capacity decreased by 8.2%.