Aviation
IATA: MAY AIR CARGO BUOYED BY EASING OF OMICRON RESTRICTIONS IN CHINA
July 7, 2022

Global air cargo markets showed performance improvement in May according to the International Air Transport Association (IATA), buoyed by the easing of Omicron restrictions in China which helped alleviate supply chain constraints.

 

IATA reported that global demand — measured in cargo tonne-kilometers (CTKs) — was 8.3% below the level since in May 2021, but an improvement on the year-on-year decline of 9.1% seen in April. 

 

Capacity up in all regions

 

Capacity was also up 2.7% year-on-year, with international operations rising 5.7%. IATA noted that this "more than offset" the 0.7% year-on-year drop in April.

 

It added that capacity expanded in all regions with Asia-Pacific experiencing the largest growth. 

 

IATA explained that air cargo performance is being impacted by several factors including trade activity ramping up slightly in May as lockdowns in China due to Omicron were eased but new export orders — a leading indicator of cargo demand and world trade — decreased in all markets, except China.  

 

IATA said the war in Ukraine also continues to impair cargo capacity used to serve Europe as several airlines based in Russia and Ukraine were key cargo players. 


"May offered positive news for air cargo, most notably because of the easing of some Omicron restrictions in China. On a seasonally adjusted basis, we saw growth (0.3%) after two months of decline. The return of Asian production as Covid-19 measures eased, particularly in China, will support demand for air cargo," said Willie Walsh, IATA's director-general.  

 

"The strong rebound in passenger traffic has increased belly capacity, although not always in the markets where the capacity crunch is most critical. But uncertainty in the overall economic situation will need to be carefully watched," he added.

 

May regional performance

 

IATA noted that Asia-Pacific airlines saw their air cargo volumes decrease by 6.6% in May 2022 compared to the same month in 2021 which was a significant improvement over the 15.8% decline in April.

 

"Airlines in the region have been heavily impacted by lower trade and manufacturing activity due to Omicron-related lockdowns in China however this started to ease in May as restrictions were lifted. Available capacity in the region fell 7.4% compared to May 2021," IATA said.

 

North American carriers, meanwhile, posted a 5.7% decrease in cargo volumes year-on-year in May noting that demand in the Asia-North America market remained subdued, however, other key routes such as Europe.

 

"North America remains strong. Capacity was up 6.8% compared to May 2021. Several carriers in the region are set to receive delivery of freighters this year, which should help address pent-up demand on routes where it is needed if economic headwinds don't persist," IATA added.

 

LatAm best, Europe worst performance

 

European carriers saw a 14.6% decrease in cargo volumes in May which IATA said was the worst performance of all regions.

 

IATA said this is attributable to the war in Ukraine. Labor shortages and lower manufacturing activity in Asia due to Omicron also affected volumes although capacity increased 3.3% in May. 

 

Middle Eastern carriers experienced an 11.6% year-on-year decrease in cargo volumes in May.

 

IATA said this is due to significant benefits from traffic being redirected to avoid flying over Russia failed to materialize.

 

"This is likely due to persisting supply chain issues in Asia," IATA added, saying that capacity was up 7.6% compared to May.

 

Latin American carriers reported an increase of 13.8% in cargo volumes in May. IATA said this was the strongest performance of all regions.

 

IATA said airlines in this region have shown optimism by introducing new services and capacity, and in some cases investing in additional aircraft for air cargo in the coming months. Capacity in May was up 33.3% year-on-year.

 

Meanwhile, IATA reported that African airlines saw cargo volumes decrease by 1.5% in May. This was significantly slower than the growth recorded the previous month (6.3%). Capacity for the region was up 3%.