October Air Freight Numbers Indicate a Continued Increase in Demand, Says IATA

According to data released by the International Air Transport Association (IATA) for October 2023, air cargo markets suggest a third straight month of stronger year-on-year demand. Global demand, which is measured in cargo tonne-kilometers (CTKs), increased by 3.8% compared to October 2022. For international operations, demand was up 3.5%.

Capacity, measured in available cargo tonne-kilometers (ACTKs), was up 13.1% when compared to October 2022 (11.1% for international operations). The growth in belly capacity was a major contributing factor this. For instance, international belly capacity, increased 30.5% year-on-year from the strength of passenger markets.

There were also other notable factors, including:

• Economic activities slowed down for the month October. With the purchasing managers’ index for manufacturing output and export orders for major economies (excluding the US) remaining below the 50 mark, this is a sign that financial challenges are forth-coming.
• Inflation in major advanced economies continued to ease from its peak in terms of consumer price index (CPI), reaching between 3% and 4% for the US and for the EU respectively, in the month of October. However, China’s CPI, however, suggested deflation for a second time this year.
• Global trade shifted and leveled off in September, with international cross-border trade being more than 5% above pre-pandemic levels.
• Following a 17-month decline, cargo yields rose in September and continued into October by presenting a 2.6% month-on-month gain, which is well-above pre-pandemic levels.

“ … Recovering demand, slightly stronger yields and the uptick in trade are all good news. But with demand still 2.4% below pre-pandemic levels, and much uncertainty remaining over the trajectory of the global economy, optimism must be balanced with caution,” notes Willie Walsh, IATA’s director general. “Nonetheless, a continued strong peak year-end season will certainly help the sector to manage through whatever turns the global economy might take in 2024.”

Chart Credit: IATA

According to the chart above, Asia-Pacific airlines had their air cargo volumes grow by 7.6% in October 2023, compared to October 2022. These numbers were nearly identical to the previous month (+7.7%). Further, carriers in this region benefited from a demand in international CTK’s on the trade lanes of: Africa-Asia (+16.7%, reporting the best annual growth since May), Middle East-Asia (+10.3%), and Europe-Asia (+8.5%).

Reference

Air Cargo Demand up 3.8% in October. IATA. December 5, 2023. Accessed December 8, 2023. https://www.iata.org/en/pressroom/2023-releases/2023-12-05-01/