Despite these positive trends, cargo traffic in terms of cargo tonne km is expected to decline by 3.8% compared to last year and 5.5% compared to 2019.

IATA noted that since March 2022, cargo tonnages have witnessed year-on-year declines for 13 consecutive months, while capacity has been steadily increasing due to the resumption of passenger operations.

"One of the main drivers behind the growth in available cargo tonne km (ACTKs) has been the recovery in bellyhold capacity as passenger aircraft return to service in various markets," IATA said.

However, global capacity has not yet reached pre-Covid levels, with seasonally adjusted ACTKs in Q1 2023 being 6.4% lower than in Q1 2019, according to IATA.

Lower ocean freight rates have also impacted air cargo revenues, as cargo has shifted back to container shipping after the initial surge in air cargo due to the Covid-19 pandemic.

Despite the challenges faced by the cargo market, IATA has doubled its net profit forecast for the overall airline industry, projecting a net profit of US$9.8 billion for this year.

The trade association of airlines noted that the increased profitability is attributed to several positive developments, including the early lifting of Covid-19 restrictions in China, sustained cargo revenues above pre-pandemic levels, albeit with lower volumes, and some relief on the cost side, particularly due to the moderation of jet fuel prices in the first half of the year, although they remain high.

"Airline financial performance in 2023 is beating expectations. Stronger profitability is supported by several positive developments. China lifted COVID-19 restrictions earlier in the year than anticipated," said Willie Walsh, IATA's Director General.

"Cargo revenues remain above pre-pandemic levels even though volumes have not. And, on the cost side, there is some relief. Jet fuel prices, although still high, have moderated over the first half of the year," he added.

Meanwhile, the IATA Director General said priorities for 2023 include SAF production incentives to accelerate progress toward net zero carbon emissions, ensuring the integrity of CORSIA as the economic measure applied to international aviation, eliminating inefficiencies in air traffic management and applying global standards consistently.

"Resilience is the story of the day, and there are many good reasons for optimism," Walsh said. "Achieving profitability at an industry level after the depths of the COVID-19 crisis opens up much potential for airlines to reward investors, fund sustainability, and invest in efficiencies to connect the world even more effectively."

"That's a big 'to do' list to achieve with just a 1.2% net profit margin. That's why we call on governments to keep their focus on initiatives that will strengthen safe, sustainable, efficient, and profitable connectivity," he added.