IATA data reveals demand for airfreight declined in October

Date Added: 1 December 2022

October 2022 global air cargo market data released by IATA illustrates that demand, measured in cargo-tonne-kilometers (CTKs), declined in the month by 13.6 percent compared with October of last year.

The decline in demand for international operations was similar at 13.5 per cent in the month, IATA added.

During the period, capacity was 0.6 percent below that of October 2021, the first year-on-year contraction since April of this year. Month-on-month capacity increased by 2.4 percent though, as carriers geared up in preparation for the year-end peak season. Overall international cargo capacity grew by 2.4 percent compared to October 2021.

In a statement, IATA said several factors in the operating environment should be noted. New export orders, a leading indicator of cargo demand, are shrinking in all markets except China and South Korea, which registered slightly higher new export orders in October. Despite the decline, latest global goods trade figures show a 5.6 percent expansion in September, a positive sign for the global economy. This is expected to primarily benefit maritime cargo, with a slight boost to air cargo as well said IATA.

The US dollar has seen a sharp appreciation, with the broad real effective exchange rate in September 2022 reaching the highest level since 1986.

A strong US dollar affects air cargo, as many costs [airfreight prices] are denominated in dollars, the currency’s appreciation adds another layer of cost on top of high inflation and high jet fuel prices.

Despite the unstable market, air cargo continues to demonstrate resilience as headwinds persist, the airline body stresses.“Cargo demand in October – while tracking below the exceptional performance of October 2021 – saw a 3.5 percent increase in demand compared to September.

“This indicates that the year-end will still bring a traditional peak-season boost despite economic uncertainties. But, as 2022 closes out, it appears that the current economic uncertainties will follow into the New Year and need continued close monitoring,” admits Willie Walsh, IATA’s director general.

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