The International Air Transport Association (IATA) said air cargo markets showed a released "healthy and stable performance" in June as decline narrowed year-on-year despite uncertainties on the horizon that continue to impact supply chains.

IATA reported that global demand — measured in cargo tonne-kilometers (CTKs) — was 6.4% below June 2021 levels, also down 6.6% for international operations.

"This was an improvement on the year-on-year decline of 8.3% seen in May," IATA said, adding that global demand for the first half-year was 4.3% below 2021 levels and also recorded a 4.2% drop for international operations during the first six months.

Compared to pre-COVID levels (2019) half-year, however, this year's first half demand was up 2.2%.

IATA said as more passenger flights were put back in service, capacity for June was up 6.7% year-on-year and was also 9.4% higher for international operations.

This was also up from the 2.7% year-on-year growth recorded in May. Capacity for the first half-year was up 4.5% and 5.7% for international operations compared to the first half-year of 2021. Compared to pre-COVID levels in 2019, this performance was also higher by 2.5%.

"Air cargo demand over the first half of 2022 was 2.2% above pre-COVID levels (first half 2019). That's a strong performance, particularly considering continuing supply chain constraints and the loss of capacity due to the war in Ukraine," said Willie Walsh, IATA's Director General.  

"Current economic uncertainties have had little impact on demand for air cargo, but developments will need to be closely monitored in the second half," he added.

For the period, IATA noted that the air cargo performance was impacted by several factors including ramped-up trade activity as lockdowns in China due to Omicron were eased; and the war in Ukraine that continues to impair cargo capacity used to serve Europe as several airlines based in Russia and Ukraine were key cargo players. 

Decline in APAC, EU, and North America

IATA said in June airlines in the Asia Pacific, North America, and Europe all recorded decline in air cargo performance for the period — with only South America and Africa showing growth.

Asia-Pacific airlines saw their air cargo volumes decrease by 2.1% in June 2022 compared to the same month in 2021, although a significant improvement over the 6.6% decline in May. 

"Airlines in the region have been heavily impacted by lower trade and manufacturing activity due to Omicron-related lockdowns in China, however this continued to ease in June as restrictions were lifted," IATA said, adding that available capacity in the region fell 6.2% compared to June, contributing to capacity being 0.2% below 2021 levels for the first half of 2022. 

North American carriers posted a 6.3% decrease in cargo volumes year-on-year in June as demand for the first half-year was 3.3% below 2021 levels.

IATA said high inflation is affecting the region and demand in the Asia-North America market is falling and the Europe-North America market has also started to decline. 

European carriers saw a 13.5% decrease in cargo volumes during the same month year-on-year which was the weakest performance of all regions. It was, however, a slight improvement over May's performance, which saw the sharpest fall in demand since early 2022.

"This is attributable to the war in Ukraine. Labor shortages and lower manufacturing activity in Asia due to Omicron also affected volumes," IATA noted.

Middle Eastern carriers also experienced a 10.8% year-on-year decrease in cargo volumes in June as significant benefits from traffic being redirected to avoid flying over Russia failed to materialize.

IATA said for this region, demand for the first half-year was 9.3% below 2021 levels, the weakest first half performance of all regions.

Meanwhile, Latin American carriers reported an increase of 19.6% in cargo volumes in June compared to the same month in 2021.

IATA noted that this was the strongest performance of all regions. Demand for the first half-year was 21.8% above 2021 levels and half-year capacity was 32.6% above 2021 levels — the strongest first half performance of all regions. 

African airlines saw cargo volumes increase by 5.7% for the month of June.

"As with carriers in Latin America, airlines in this region have shown optimism by introducing additional capacity. Capacity was 10.3% above June 2021 levels. Demand for the first half-year was 2.9% above 2021 levels," IATA said.