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On July 29, the International Air Transport Association (IATA, hereinafter referred to as the "International Air Transport Association") released a regular report on global air cargo, which showed that the global air cargo market in June this year increased by 9.9% compared with that before the COVID-19 (June 2019). The growth rate of air cargo in the first half of the year soared to 8%, marking the strongest first half performance since 2017 (when the industry's annual cargo demand increased by 10.2% year-on-year).

Affected by the COVID-19, the year-on-year results of monthly data in 2021 and 2020 are distorted. Unless otherwise stated, the year-on-year results in this article are compared with the normal demand data in June 2019.

The global air cargo demand (calculated by cargo ton kilometers or "CTKs") increased by 9.9% year-on-year in June 2019.

There are significant differences among different regions. In June, North American airlines grew by 5.9%. Middle Eastern airlines grew by 2.1%, European airlines grew by 1.6%, African airlines grew by 0.5%, and Asia Pacific airlines grew by 0.3%. Latin American airlines decreased by 0.5%.

Due to the continuous grounding of passenger aircraft, the total transport capacity (calculated in terms of available freight ton kilometers or "ACTKs") is still 10.8% lower than the level before the COVID-19 epidemic (June 2019). The belly cargo capacity decreased by 38.9% compared to June 2019, partially offset by a 29.7% increase in cargo charter capacity.

Potential economic growth and favorable supply chain conditions drive air freight:

The inventory to sales ratio in the United States is at its lowest level in history. This means that companies must quickly replenish their inventory, usually using air freight.

Purchasing Managers' Index (PMIs) - a leading indicator of air cargo demand, indicates that business confidence, manufacturing output, and new export orders are rapidly growing in most economies. The significant transition from consumer goods to services has not yet been achieved.

The cost competitiveness and reliability of air freight transportation have improved compared to container transportation. The average price of air freight has significantly decreased compared to sea freight. The scheduling reliability of ocean shipping companies has also declined, with a reliability of about 40% in May, compared to 70-80% before the crisis.

Willie Walsh, president of IATA, said: "As the global economy continues to recover from the COVID-19 crisis, the air cargo business is booming. The demand in the first half of the year is 8% higher than the level before the crisis. Air cargo has become the income lifeline of many airlines, and the closure of the border has caused serious damage to the international air passenger transport business. It is worth mentioning that the strong performance of cargo in the first half of the year will continue."

Air Cargo Market - June 2021

6Monthly performance by region

Compared to the same period in 2019, Asia Pacific airlines saw a 3.8% increase in international air cargo demand in June 2021. The international transportation capacity in the region has decreased by 19.8% compared to June 2019. Despite high demand, regional growth has been hindered due to a shortage of international transportation capacity and weaker manufacturing PMI compared to Europe and the United States.

Compared to June 2019, North American airlines saw a 23.4% increase in international demand in June 2021. Economic fundamentals and well functioning supply chains continue to drive cargo growth for North American airlines. Compared to June 2019, international transportation capacity has decreased by 2.1%.

European airlines saw a 6.6% increase in international demand in June 2021 compared to the same period in 2019. The international transportation capacity in June 2021 decreased by 16.2% compared to June 2019. The European manufacturing PMI is very strong, and the market is still driving the growth of European airline cargo.

The international cargo volume of Middle Eastern airlines in June 2021 increased by 17.1% compared to June 2019, thanks to the strong performance of trade routes from the Middle East to Asia and from the Middle East to North America. Compared to the same period in 2019, international transportation capacity decreased by 9% in June.

Latin American airlines' international cargo volume in June decreased by 22.9% compared to the same period in 2019, showing the weakest performance among all regions and a slight decrease compared to the previous month. The international capacity in June 2021 decreased by 28.4% compared to June 2019, and the poor performance was mainly due to local airlines losing market share to other regional airlines.

Compared to the same period in 2019, African airlines saw a 33.5% increase in international freight demand in June of this year. Although the growth rate ranks first among all regions, the cargo volume of African airlines accounts for only 2% of the global cargo volume. The international transportation capacity in June decreased by 4.9% compared to the same period in 2019. (International Air Transport Association)

Source: China Civil Aviation News