Asia Pacific airlines saw another month of cargo decline as the worsening inflationary pressures globally triggered a slowing of international trade flows.

The Kuala Lumpur-based Association of Asia Pacific Airlines (AAPA) said Asia Pacific airlines saw international air cargo demand — measured in freight tonne-kilometers (FTK) — fell by 4.1% year-on-year in June.

This comes as APAC airlines already recorded a 5.6% year-on-year drop in cargo volumes for May, an 8.5% decline in April, and another 1.3% drop in March after 14 consecutive months of growth.

"The slowing of international trade flows, amid a globally worsening inflationary environment, further dampened demand for air shipments," AAPA said.

It added that in tandem with the recovery in passenger services, increased bellyhold space contributed to a 5.7% growth in offered freight capacity.

Weakening air cargo in APAC

This led to a 6.9 percentage point decline in the international freight load factor to an average of 67.2% for the month.

"The recovery of international air travel is well underway, only dampened by the weakening of air cargo demand as a result of declining exports and continuing supply chain constraints," commented Subhas Menon, AAPA Director General.

June's cargo performance is in contrast with the recovery seen in passenger numbers in the region for the month.

AAPA said the number of international passengers carried rose more than "six-fold" year-on-year to a combined 9 million in June, bringing demand to 28.3% of the corresponding pre-pandemic month in 2019.

The robust growth in international air passenger demand is driven by the continuously increasing willingness to fly driving a recovery in both leisure and corporate travel.

Menon warned, however, of continuing challenges that could hamper further recovery in the aviation industry.

"The region's airlines are resuming flights to more destinations, as economies reopen for business and international travel. This is a welcome change that was a long time coming. Although the number of international passengers carried by the airlines in the first half of 2022 is 330% higher than that of 2021, it is still well below pre-COVID levels," Menon said.

Operational challenges in the industry

"Meanwhile, escalating fuel prices and cost inflation are risks to the nascent recovery and return to profitability just as the industry is emerging from its worst crisis," he added.

The AAPA chief noted that airlines are also confronting operational challenges that can slow down the recovery as travel demand accelerates.

"While the region has not experienced the widespread chaos observed in other parts of the world, there are signs of strain in the aviation ecosystem as a result of manpower shortages. In the short term, hiring and retention incentives are being offered, but more needs to be done to rebuild the resilience of the industry for the future," Menon said.

"To sustain the growth in air travel, cooperation among industry stakeholders as well as supportive government policies remains crucial in addressing operational constraints as demand picks up speed. Rational and durable measures are vital in the event of a deterioration in the public health situation or a new crisis."