IATA says passenger demand remains strong with air cargo heading to pre-pandemic levels

The International Air Transport Association (IATA) announced passenger data for July 2022 showing that the recovery in air travel continues to be strong. Total traffic in July 2022 (measured in revenue passenger kilometres or RPKs) was up 58.8 percent compared to July 2021. Globally, traffic is now at 74.6 percent of pre-crisis levels.

Domestic traffic for July 2022 was up 4.1 percent compared to the year-ago period and is now driving the recovery. Total July 2022 domestic traffic was at 86.9 percent of the July 2019 level. China saw strong month-to-month improvement compared to June.

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Download the IATA Air Cargo Market Analysis here.

International traffic rose 150.6 percent versus July 2021. July 2022 international RPKs reached 67.9 percent of July 2019 levels. All markets reported strong growth, led by Asia-Pacific.

“July’s performance continued to be strong, with some markets approaching pre-COVID levels. And that is even with capacity constraints in parts of the world that were unprepared for the speed at which people returned to travel. There is still more ground to recover, but this is an excellent sign as we head into the traditionally slower autumn and winter quarters in the Northern Hemisphere,” said Willie Walsh, IATA’s director general.

International Passenger Markets

Asia-Pacific airlines posted a 528.8 percent rise in July traffic compared to July 2021, the strongest year-over-year rate among the regions. Capacity rose 159.9 percent and the load factor was up 47.1 percentage points to 80.2 percent.

European carriers saw July traffic rise 115.6 percent versus July 2021. Capacity rose 64.3 percent, and load factor climbed 20.6 percentage points to 86.7 percent, second highest among the regions.

Middle Eastern airlines’ traffic climbed 193.1 percent in July compared to July 2021. July capacity rose 84.1 percent versus the year-ago period, and load factor climbed 30.5 percentage points to 82 percent.

North American carriers had a 129.2 percent traffic rise in July versus the 2021 period. Capacity rose 79.9 percent, and load factor climbed 19.4 percentage points to 90.3 percent, which was the highest among the regions for a second month.

Latin American airlines’ July traffic rose 119.4 percent compared to the same month in 2021. July capacity rose 92.3 percent and load factor increased 10.5 percentage points to 85.2 percent.

African airlines saw an 84.8 percent rise in July RPKs versus a year ago. July 2022 capacity was up 46.7 percent and load factor climbed 15.5 percentage points to 75.0 percent, the lowest among regions.

Domestic Passenger Markets

Brazil’s domestic traffic rose 24.2 percent in July and have now reached pre-pandemic levels. India’s domestic RPKs rose 97.8 percent in July and are now exceeding 81 percent of 2019 levels.

“Aviation continues to recover as people take advantage of their restored freedom to travel. The pandemic showed that aviation is not a luxury but a necessity in our globalised and interconnected world. Aviation is committed to continuing to meet the demands of people and commerce and to do it sustainably. We have set a goal to achieve net zero CO2 emissions by 2050, which is in line with the targets of the Paris Agreement. Governments will have the opportunity to support our commitment by agreeing to a Long-Term Aspirational Goal (LTAG) of net zero aviation CO2 emissions by 2050 at the upcoming 41st Assembly of the International Civil Aviation Organization (ICAO). With governments supporting the same goal and timeline, we and our value chain partners can move forward with confidence towards a net zero carbon future,” Walsh said.

Air cargo tracks near pre-COVID levels

IATA also said global air cargo markets showing that demand continued to track at near pre-pandemic levels in July (-3.5 percent), but below July 2021 performance (-9.7 percent). Global demand, measured in cargo tonne-kilometres (CTKs), fell 9.7 percent compared to July 2021 (-10.2 percent for international operations). Demand stood at -3.5 percent compared to July 2019. Capacity was 3.6 percent above July 2021 (+6.8 percent for international operations) but still 7.8 percent below July 2019 levels. Several factors in the operating environment should be noted:

• New export orders, a leading indicator of cargo demand, decreased in all markets, except China which began a sharp upward trend in June.
• The war in Ukraine continues to impair cargo capacity used to serve Europe as several airlines based in Russia and Ukraine were key cargo players.
• Global goods trade continued to recover in Q2 and the additional easing of COVID-19 restrictions in China will further boost recovery in coming months. While maritime will be the main beneficiary, air cargo is set to receive a boost.

“Air cargo is tracking at near 2019 levels although it has taken a step back compared to the extra-ordinary performance of 2020-2021. Volatility resulting from supply chain constraints and evolving economic conditions has seen cargo markets essentially move sideways since April. July data shows us that air cargo continues to hold its own, but as is the case for almost all industries, we’ll need to carefully watch both economic and political developments over the coming months,” said Walsh.

July Regional Performance

Asia-Pacific airlines saw their air cargo volumes decrease by 9.0 percent in July 2022 compared to the same month in 2021. This was a significant decrease over the 2.1 percent decline in June. Airlines in the region continue to be impacted by the conflict in Ukraine, labour shortages, and lower levels of trade and manufacturing activity due to Omicron-related restrictions. The scale of the decrease indicates volatility in volumes, as pent-up demand from the last Omicron-related lockdowns in China should prevent such notable declines in volumes. Available capacity in the region increased by 2.7 percent compared to July 2021.

North American carriers posted a 5.7 percent decrease in cargo volumes in July 2022 compared to the same month in 2021. This was an improvement over the 13.5 percent decline in June.  The lifting of restrictions in China is expected to boost demand in the coming months. Capacity was up 4.2 percent compared to July 2021.

European carriers saw a 17 percent decrease in cargo volumes in July 2022 compared to the same month in 2021. This was the worst performance of all regions for the third month in a row. This is attributable to the war in Ukraine. Labour shortages and lower manufacturing activity in Asia due to Omicron also affected volumes. Capacity increased 0.9 percent in July 2022 compared to July 2021.

Middle Eastern carriers experienced a 10.9 percent year-on-year decrease in cargo volumes in July 2022. Significant benefits from traffic being redirected to avoid flying over Russia failed to materialize and stagnant cargo volumes to/from Europe impacted the region’s performance. Capacity was up 4.9 percent compared to July 2021.

Latin American carriers reported an increase of 9.2 percent in cargo volumes in July 2022 compared to July 2021. This was the strongest performance of all regions. Airlines in this region have shown optimism by introducing new services and capacity, and in some cases investing in additional aircraft for air cargo in the coming months.  Capacity in July was up 21.4 percent compared to the same month in 2021.

African airlines saw cargo volumes decrease by 3.5 percent in July 2022 compared to July 2021. This was significantly slower than the growth recorded the previous month (5.7 percent). Capacity was 2.2 percent below July 2021 levels.

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