IATA: Passenger demand stays strong in January; air cargo makes soft start to 2023

The International Air Transport Association (IATA) announced that the recovery in air travel demand is continuing in 2023, based on January traffic results. Total traffic in January 2023 (measured in revenue passenger kilometres or RPKs) rose 67.0 percent compared to January 2022. Globally, traffic is now at 84.2 percent of January 2019 levels. Domestic traffic for January 2023 rose 32.7 percent compared to the year-ago period, helped by the lifting of the zero-COVID policy in China.

Download the IATA passenger market analysis here.

Total January 2023 domestic traffic was at 97.4 percent of the January 2019 level. International traffic climbed 104.0 percent versus January 2022 with all markets recording strong growth, led by carriers in the Asia-Pacific region. International RPKs reached 77 percent of January 2019 levels.

“Air travel demand is off to a very healthy start in 2023. The rapid removal of COVID-19 restrictions for Chinese domestic and international travel bodes well for the continued strong industry recovery from the pandemic throughout the year. And, importantly, we have not seen the many economic and geopolitical uncertainties of the day dampening demand for travel,” said Willie Walsh, IATA’s director general. “With strong travel demand continuing through the traditionally slower winter season in the Northern Hemisphere, the stage is set for an even busier spring and summer. At a time when many are just beginning to enjoy their newly restored travel freedoms, it is especially disappointing to see the Dutch government making plans to limit their movements by unilaterally and unjustly reducing operations at Schiphol Airport.”

International Passenger Markets

• Asia-Pacific airlines posted a 376.3 percent increase in January traffic compared to January 2022, by far the strongest year-over-year rate among the regions, but off of a very low base when much of the region was still closed to travel. Capacity rose 167.1 percent and the load factor increased 36.6 percentage points to 83.3 percent, the highest among the regions.
• European carriers saw a 60.6 percent traffic rise versus January 2022. Capacity increased 30.1 percent, and load factor rose 14.2 percentage points to 75.0 percent.
• Middle Eastern airlines’ January traffic rose 97.7 percent compared to January a year ago. Capacity increased 45.9 percent and load factor climbed 20.8 percentage points to 79.2 percent.
• North American carriers reported an 82.4 percent traffic increase in January versus the 2022 period. Capacity rose 37.3 percent, and load factor climbed 19.7 percentage points to 79.6 percent.
• Latin American airlines had a 46.8 percent traffic increase compared to the same month in 2022. January capacity climbed 34.3 percent and load factor rose 7.1 percentage points to 82.7 percent, the second highest among the regions.
• African airlines’ traffic rose 124.8 percent in January 2023 versus a year ago. January capacity was up 82.5 percent and load factor climbed 13.9 percentage points to 73.7 percent, the lowest among regions.

Domestic Passenger Markets

• Australia’s domestic traffic rose 107.3 percent in January compared to a year ago and now stands at 88.8 percent of pre-pandemic levels.
• China’s domestic RPKs rose 37.2 percent in January, the first month over month annual increase since August 2022 and is now at 86.3 percent of January 2019 levels.

Air cargo makes soft start to 2023

IATA also released data for January 2023 global air cargo markets showing that air cargo demand declined as economic headwinds persist. Global demand, measured in cargo tonne-kilometres (CTKs), fell 14.9 percent compared to January 2022 (-16.2 percent for international operations). Capacity (measured in available cargo tonne-kilometres, ACTK) was up 3.9 percent compared to January 2022. This was the first year-on-year growth in capacity since October 2022. International cargo capacity increased 1.4 percent compared to January 2022. The uptick in ACTKs reflects the strong recovery of belly capacity in passenger airline markets offsetting a decline international capacity offered by dedicated freighters.

Download the IATA cargo market analysis here.

Several factors in the operating environment should be noted:

• The global new export orders component of the manufacturing PMI, a leading indicator of cargo demand, increased in January for the first time since October 2022. For major economies, new export orders are growing, and in China and the US, PMI levels are close to the critical 50-mark indicating that demand for manufactured goods from the world’s two largest economies is stabilising.
• Global goods trade decreased by 3.0 percent in December, this was the second monthly decline in a row.
• The Consumer Price Index for G7 countries decreased from 7.4 percent in November to 6.7 percent in January. Inflation in producer (input) prices reduced by 2.2 percentage points to 9.6 percent in December.

“With January cargo demand down 14.9 percent and capacity up 3.9 percent, 2023 began under some challenging business conditions. That was accompanied by persistent uncertainties, including war in Ukraine, inflation, and labour shortages. But there is solid ground for some cautious optimism about air cargo. Yields remain higher than pre-pandemic. And China’s much faster than expected shift from its zero COVID policy is stabilising production conditions in air cargo’s largest source market. That will give a much-needed demand boost as companies increase their engagement with China,” said IATA’s Walsh.

January Regional Performance

• Asia-Pacific airlines saw their air cargo volumes decrease by 19 percent in January 2023 compared to the same month in 2022. This was an improvement in performance compared to December (-21.2 percent).  Airlines in the region continue to be impacted by lower levels of trade and manufacturing activity and disruptions in supply chains due to the residual effects of COVID restrictions that were imposed by China. Additionally, the positioning of the Lunar New Year would have impacted cargo volumes in January. Available capacity in the region increased by 8.8 percent compared to January 2022.
• North American carriers posted an 8.7 percent decrease in cargo volumes in January 2023 compared to the same month in 2022. This was a slight decrease in performance compared to December (-8.5 percent). Capacity increased 2.3 percent compared to January 2022.
• European carriers saw the weakest performance of all regions with a 20.4 percent decrease in cargo volumes in January 2023 compared to the same month in 2022. This was a decrease in performance compared to December (-19.4 percent). Airlines in the region continue to be most affected by the war in Ukraine. Capacity decreased 9.3 percent in January 2023 compared to January 2022.
• Middle Eastern carriers experienced a 11.8 percent year-on-year decrease in cargo volumes in January 2023. This was an improvement to the previous month (-14.4 percent). Capacity increased 9.6 percent compared to January 2022.
• Latin American carriers reported a 4.6 percent increase in cargo volumes in January 2023 compared to January 2022. This was the strongest performance of all regions, and a significant improvement in performance compared to December which saw no growth. Capacity in January was up 34.4 percent compared to the same month in 2022.
• African airlines saw cargo volumes decrease by 9.5 percent in January 2023 compared to January 2022. This was an improvement in performance compared to the previous month (-10 percent). Capacity was 1.8 percent below January 2022 levels.

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