The worldwide air cargo markets saw a dip in May this year, thereby signalling the weakening of market conditions, as per the data from the International Air Transport Association- IATA. According to the data that has been released, global demand, which is measured in cargo tonne-kilometres, lessened by 5.2% vis-à-vis May 2022, with global operations witnessing a sharp decline of 6%. In contrast to this, capacity as laid down by available cargo tonne kilometres saw a surge of 14.5%, mainly due to a rise in belly capacity that is driven by recovering passenger demand. The present capacity now exceeds the pre-pandemic levels by 5.9%.
It is well to be noted that the key market indicators have indeed pointed towards a worldwide economic downturn. The global manufacturing purchasing managers’ index showcased a yearly contraction of 1.4% when it comes to new export orders and a dip of 5.2% YoY in terms of production PMI, thereby signalling a slowdown when it comes to international manufacturing demand. Apparently, the global goods trade also saw a slump of 0.8% in April, with air cargo demand witnessing a weakening of 6.3% YoY because of macroeconomic issues and supply chain challenges, according to the IATA.
That said, there is indeed some relief when it comes to supply chains, as the worldwide supplier delivery PMI saw a surge to 54.5 in May, an increase from 35 in October 2021, thereby signifying delivery times that are shorter. This could indeed be an indication of a lessening worldwide goods trade demand.
The fact is that the Asia-Pacific region did witness a slump of 3.3% when it comes to air cargo volumes in May this year as compared to the same month last year. Interestingly, the North American carriers performed the weakest, with a slump of 8.1% in cargo volumes. European carriers too saw a drop of 6.7%, while middle-eastern carriers experienced a 3.1% dip YoY.
It is well worth noting that Latin American carriers were the only ones that reported a positive performance by posting a 3.6% surge in cargo volumes vis-à-vis May last year. African Airlines, on the other hand, saw a drop of 2.4% in demand as compared to May last year. This was mainly due to the conflict that erupted in Sudan.