Even though the rebound in global airfreight traffic slowed, pricing continued to rise further, indicating that the price of jet fuel is replacing capacity constraints as the driver of upward rate momentum.

Worldwide air cargo tonnage in week 13 (March 23-29) was unchanged from the previous week, data from WorldACD show, as volumes out of four regions slipped, while the other two recorded low single-digit increases, an indication that the return of capacity – albeit still down from levels before the Middle East conflict – has absorbed current demand.

On the other hand, average global full-market air cargo rates continued to rise to a new high this year at US$2.98, but the momentum slowed for the second week in a row, from +10% in week 11 to +5% last week, on a week-on-week basis. Since the outbreak of the Iran war in late February, the price of jet fuel has more than doubled, reaching an all-time high in March.

Inevitably, the higher jet fuel price led to upward pricing momentum.

Airlines based in the Gulf region continued to rebuild their capacity but still face constraints from the conflict, especially on their passenger schedules. Compared with the previous two weeks (2Wo2W), capacity from the Middle East and South Asia (MESA) region was up 31% for the fortnight from March 16-29, but still 33% below the level in the corresponding fortnight a year ago.

All other regions registered capacity growth on a 2Wo2W basis as well as year on year (YoY), led by a 15% 2Wo2W surge for origin Africa, which can be attributed to the resumption of Gulf airline services to the continent.

Demand does not keep up with capacity growth

Asia Pacific (+2%) and Europe (+1%) were the only regions to see week‑on‑week growth in chargeable weight, while MESA, Africa, and North America fell ‑4% and CSA slipped ‑1%. Year on year, global volumes were down ‑6%, with CSA (+7%) the only region growing; MESA (‑25%) and Africa (‑21%) saw the steepest declines.

After two weeks of gains, MESA–Europe traffic dropped ‑11% WoW and ‑20% YoY, partly due to the Eid‑al‑Fitr holiday. Dubai–Europe fell ‑3% WoW (‑31% YoY) and India–Europe ‑1% WoW (‑13% YoY). MESA–US tonnage also declined, especially ex‑Dubai (‑44% WoW) and ex‑Bangladesh (‑40%), while India rose +6% WoW (+7% YoY).

Despite weaker demand, WorldACD noted hat MESA–Europe spot rates rose +5% WoW, driven by a +28% jump from Dubai. Only Bangladesh (‑6%) and Sri Lanka (‑1%) saw declines. YoY, rates were up +84%, with Dubai at US$5.44 (3× higher) and Colombo at US$4.77 (2× higher).

MESA–US pricing increased +9% WoW and +73% YoY. Dubai surged +28% WoW to US$10.33, while other origins saw smaller increases. YoY, Dubai rates were up +152%, and other origins posted double‑digit gains, including India at US$7.77 (+70%).

Asia Pacific pricing on the rise

WorldACD said spot rates from Asia Pacific to the US climbed +9%, WoW, to end up +8% higher than a year ago, to $5.91, with spot prices rising across all origins. Both China and South Korea saw +13% weekly rate increases, while prices rose +12% from Hong Kong and +10% from Singapore.

From Asia Pacific to Europe spot pricing rose +4%, WoW, for a +28% gain year on year. It jumped +41%, WoW, out of Indonesia for a +115% surge over last year, while all other origins saw single-digit weekly rate hikes led by +9% increases out of Taiwan and Singapore. After Indonesia, Singapore showed the highest increase YoY (+95%), while Hong Kong went up by only +6%.

Rates barely changed on a week-on-week basis from Japan (+1%), Vietnam (+2%) and China, Hong Kong and Thailand (+4%).

Meanwhile, traffic volumes from Asia Pacific were relatively flat week on week, showing no growth to the US and a +1% increase to Europe, which reinforces the argument for a fuel-price driven rate momentum.

The analysis said notable outliers are Indonesia (down -45% to US and -27% to Europe, WoW) and Malaysia (-11% to US, -14% to Europe), where activity was also partially impacted by the Eid-al-Fitr holiday.

"Airlines in the northern hemisphere switch to their summer schedule by the start of April, which should begin to impact capacity and pricing in a number of markets in week 14. However, the ongoing conflict in the Middle East will likely have a much larger impact on demand and pricing," WorldACD said.