IATA: War in Ukraine, Omicron weigh on air cargo

0
128
covid-19-iata-says-world-faces-severe-cargo-crunch-as-virus-wreaks-havoc-globally
Carriers like Korean Air have been relying on cargo to help them survive the pandemic. (PHOTO: Korean Air)

https://www.aircraftinteriorsexpo.com/?utm_source=asianaviation&utm_medium=barter&utm_campaign=aavwebsitebannerhomepagemarchThe International Air Transport Association (IATA) released March 2022 data for global air cargo markets showing a drop in demand. The effects of COVID-19 Omicron variant in Asia, the Russia – Ukraine war and a challenging operating backdrop contributed to the decline.

IATA said global demand, measured in cargo tonne-kilometres (CTKs), fell 5.2 percent  compared to March 2021 (-5.4 percent for international operations). Capacity was 1.2 percent above March 2021 (+2.6 percent for international operations). While this is in positive territory, it is a significant decline from the 11.2 percent year-on-year increase in February. Asia and Europe experienced the largest falls in capacity.

Download the IATA March cargo market analysis here.

IATA said several factors in the operating environment should be noted:

  • The war in Ukraine led to a fall in cargo capacity used to serve Europe as several airlines based in Russia and Ukraine were key cargo players. Sanctions against Russia led to disruptions in manufacturing. And rising oil prices are having a negative economic impact, including raising costs for shipping.
  • New export orders, a leading indicator of cargo demand, are now shrinking in all markets except the US. The Purchasing Managers’ Index (PMI) indicator tracking global new export orders fell to 48.2 in March. This was the lowest since July 2020.
  • Global goods trade has continued to decline in 2022, with China’s economy growing more slowly because of COVID-19 related lockdowns (among other factors); and supply chain disruptions amplified by the war in Ukraine.
  • General consumer price inflation for the G7 countries was at 6.3% year-on-year in February 2022, the highest since 1982.
IATA Director General Willie Walsh at the 2021 annual general meeting in Boston. (PHOTO: IATA)

“Air cargo markets mirror global economic developments. In March, the trading environment took a turn for the worse,” said Willie Walsh, IATA’s director general. “The combination of war in Ukraine and the spread of the Omicron variant in Asia have led to rising energy costs, exacerbated supply chain disruptions, and fed inflationary pressure. As a result, compared to a year ago, there are fewer goods being shipped—including by air. Peace in Ukraine and a shift in China’s COVID-19 policy would do much to ease the industry’s headwinds. As neither appears likely in the short-term, we can expect growing challenges for air cargo just as passenger markets are accelerating their recovery.”

March Regional Performance

Cathay, like other airlines, is relying on cargo to help carry it through the pandemic. (PHOTO: Cathay Pacific)
  • Asia-Pacific airlines saw their air cargo volumes decrease by 5.1 percent in March 2022 compared to the same month in 2021. Available capacity in the region fell 6.4 percent compared to March 2021, the largest drop of all regions. The zero-COVID policy in mainland China and Hong Kong is impacting performance.
  • North American carriers posted a 0.7 percent decrease in cargo volumes in March 2022 compared to March 2021. Demand in the Asia-North America market declined significantly, with seasonally adjusted volumes falling by 9.2 percent in March. Capacity was up 6.7 percent compared to March 2021.
  • European carriers saw a 11.1 percent decrease in cargo volumes in March 2022 compared to the same month in 2021. This was the weakest of all regions. The Within Europe market fell significantly, down 19.7 percent month-on-month. This is attributable to the war in Ukraine. Labour shortages and lower manufacturing activity in Asia due to Omicron also affected demand. Capacity fell 4.9 percent in March 2022 compared to March 2021.
  • Middle Eastern carriers experienced a 9.7 percent year-on-year decrease in cargo volumes in March. Significant benefits from traffic being redirected to avoid flying over Russia failed to materialise. This is likely due to subdued demand overall. Capacity was up 5.3 percent compared to March 2021.
  • Latin American carriers reported an increase of 22.1 percent in cargo volumes in March 2022 compared to the 2021 period. This was the strongest performance of all regions. Some of the largest airlines in the region are benefitting from the end of bankruptcy protection. Capacity in March was up 34.9 percent compared to the same month in 2021.
  • African airlines saw cargo volumes increase by 3.1 percent in March 2022 compared to March 2021. Capacity was 8.7 percent above March 2021 levels.

Use this one


For Editorial Inquiries Contact:
Editor Matt Driskill at matt.driskill@asianaviation.com
For Advertising Inquiries Contact:
Head of Sales Kay Rolland at kay.rolland@asianaviation.com

LEAVE A REPLY

Please enter your comment!
Please enter your name here