The global air cargo markets showed a drop in demand and contraction in capacity during April 2022, according to an International Air Transport Association (IATA) report.

The effects of Omicron in Asia and the Russia–Ukraine war continue to create a challenging operating backdrop that is driving the decline, it said.

Middle Eastern carriers experienced a 11.9% year-on-year decrease in cargo volumes in April. Significant benefits from traffic being redirected to avoid flying over Russia failed to materialise. This is likely due to persisting supply chain issues in Asia. Capacity was up 6% compared to April 2021, the report said.

Global demand, measured in cargo tonne-kilometers (CTKs), fell 11.2% compared to April 2021 (-10.6% for international operations). Global demand is down 1% compared to April 2019.

Capacity was 2% below 2021 (+1.2% for international operations). Both global capacity and international capacity decreased slightly in April compared to March. Asia experienced the largest falls in capacity.

Key factors in the operating environment to be noted are:

* 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. And the zero-Covid policy in China led to capacity challenges due to flight cancellations because of labor shortages.

* New export orders, a leading indicator of cargo demand and world trade are now shrinking in all markets except the US. 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). The lockdowns have brought much of the world’s largest port, Shanghai, to a standstill. Supply chain disruptions due to the Ukraine-Russia conflict are also adding to the downward pressure on trade.

“Air cargo demand fell by 11.2% in April and capacity contracted 2% compared to April 2021. The combination of the war in Ukraine and Covid-19 lockdowns in China have pushed up energy costs, intensified supply chain disruptions, and fed inflation. The operating environment is challenging for all businesses, including air cargo. But with China easing lockdown restrictions, there is cause for some optimism and the supply/demand imbalance is keeping yields high,” said Willie Walsh, IATA’s Director General.

Asia-Pacific airlines saw their air cargo volumes decrease by 15.8% in April 2022 compared to the same month in 2021. This was the weakest performance of all regions and significantly slower than the previous month (-5.1%). Airlines in the region have been heavily impacted by lower trade and manufacturing activity due to Omicron-related lockdowns in China. Because of this, available capacity in the region fell 19.4% compared to April 2021, the largest drop of all regions.

North American carriers posted a 6.6% decrease in cargo volumes in April 2022 compared to April 2021. Demand in the Asia-North America market declined significantly, however, other key routes such as Europe – North America remain strong. Capacity was up 5.2% compared to April 2021. Several carriers in the region are set to receive delivery of freighters in 2022, which should help address pent-up demand on routes where it is needed.

European carriers saw a 14.4% decrease in cargo volumes in April 2022 compared to the same month in 2021. The Within Europe market fell significantly, down 24.6% month on month. This is attributable to the war in Ukraine. Labor shortages and lower manufacturing activity in Asia due to Omicron also affected volumes. Capacity fell 0.2% in April 2022 compared to April 2021.

Copyright 2022 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).