The International Air Transport Association (IATA) released October 2021 data for global air cargo markets showing that demand continued to be well above pre-crisis levels and that the capacity constraints, although still persistent, have eased slightly.  

In a statement, it said global demand, measured in cargo tonne-kilometers (CTKs), was up 9.4% compared to October 2019 (10.4% for international operations), before the onset of Covid-19.

IATA also noted that "capacity constraints have eased slightly" but remain 7.2% below pre-COVID-19 levels (October 2019) (-8.0% for international operations). 

"Economic conditions continue to support air cargo growth but are slightly weaker than in the previous months," it added, noting several factors driving this including supply chain disruptions and the resulting delivery delays prompting shippers to switch to air transport; as well as the cost-competitiveness of air cargo relative to that of container shipping, which it said "remains favorable."

It added that relevant components of the October PMIs (new export orders and manufacturing output) have been in a gradual slowdown since May but remain in favorable territory and that the inventory-to-sales ratio remains low ahead of the peak year-end retail events such as Christmas — which is positive for air cargo as "manufacturers turn to air cargo to rapidly meet demand."

"October data reflected an overall positive outlook for air cargo. Supply chain congestion continued to push manufacturers towards the speed of air cargo. Demand was up 9.4% in October compared to pre-crisis levels. And capacity constraints were slowly resolving as more passenger travel meant more belly capacity for air cargo," said Willie Walsh, IATA's  Director General. 

Reaction to Omicron variant "a concern"

"The impact of government reactions to the Omicron variant is a concern. If it dampens travel demand, capacity issues will become more acute," he added.

"After almost two years of COVID-19, governments have the experience and tools to make better data-driven decisions than the mostly knee-jerk reactions to restrict travel that we have seen to date. Restrictions will not stop the spread of Omicron. Along with urgently reversing these policy mistakes, the focus of governments should be squarely on ensuring the integrity of supply chains and increasing the distribution of vaccines," Walsh further said.

Regional performance

For October, IATA said Asia-Pacific airlines saw their international air cargo volumes increase 7.9% compared to the same month in 2019 — "close to a doubling in growth" compared to the previous month's 4% expansion.

"The improvement was partly driven by increased capacity on Europe-Asia routes as several important passenger routes reopened," IATA said.

North American carriers posted an 18.8% increase in international cargo volumes also for the same period which was "on par" with September's performance (18.9%).

IATA said demand for faster shipping times and strong US retail sales are underpinning the North American performance. 

European carriers, meanwhile, saw an 8.6% increase in international cargo volumes, an improvement compared to the previous month (5.8%) driven by manufacturing activity, orders and long supplier delivery times which IATA said "remain favorable to air cargo demand."

IATA said Middle Eastern carriers experienced a 9.4% rise in international cargo volumes during the period compared to the same month in 2019.

This shows a "significant drop in performance" compared to the previous month (18.4%), which IATA said was "due to a deterioration in traffic on several key routes such as Middle East-Asia, and Middle East-North America."

Latin American carriers reported a decline of 6.6% in international cargo, which IATA noted was "the weakest performance of all regions" but an improvement compared to the previous month (a 17% fall).

African airlines, on the other hand, saw international cargo volumes increase by 26.7% in October, a deterioration from the previous month (35%) but still the largest increase of all regions.

IATA said international capacity was 9.4% higher than pre-crisis levels, the only region in positive territory, albeit on small volumes.