Asia Pacific airlines recorded another month of cargo decline in May — following a downtrend seen since the start of the year as muted trade activities continued dampened demand for air shipments. 

Preliminary May 2023 traffic figures released by the Kuala Lumpur-based Association of Asia Pacific Airlines (AAPA) showed international air cargo demand — measured in freight tonne-kilometres (FTK) — falling 7.0% year-on-year against the background of persisting global economic uncertainties.

This follows a 5.5% year-on-year drop in April and a 10.9% year-on-year decline in international air cargo demand in March, a 9.8% drop in February 2023, and a steeper 20.5% decline recorded in January this year.

Air cargo demand also dropped 8.2% for the full year 2022. Asia Pacific airlines have been seeing freight volumes decline since March 2022. 

"Subdued demand conditions, driven by weak business confidence levels, adversely impacted air cargo markets," said Subhas Menon, AAPA director general.

Meanwhile, for the month, offered capacity rose by 6.0%, leading to an 8.5 percentage point decline in the average international freight load factor to 60.1% for the month. 

"Air cargo demand remained soft, reflecting the prevailing weak global economic conditions and, in particular, the slowdown in the manufacturing sector," Menon added.

Air cargo demand to remain muted

Looking ahead, Menon said, air cargo demand is likely to remain subdued.

"Trade tensions are likely to weigh down on cargo markets for some time to come, whereas air travel demand is expected to demonstrate resilience in spite of the headwinds in the external environment," the AAPA director general said.

Nonetheless, Menon signalled a positive outlook for the airline industry as other market challenges continue to ease.

"Overall, the outlook for the airlines remains positive, with the recent moderation in oil prices providing some relief to operating expenditure even though the industry will continue to face inflationary cost pressures," he said.

"Against this background, the region's airlines are focusing their attention on disciplined cost management throughout the business while maintaining excellent safety and customer service standards," Menon added.