Air Cargo Maintains Momentum in May

The International Air Transport Association (IATA) reported continued buoyancy in the air cargo market for May 2024. Global demand, measured in cargo tonne-kilometers (CTKs), surged by 14. 7% compared to May 2023. This marks the sixth consecutive month of double-digit year-on-year growth, solidifying a trend of robust activity in the air freight sector.

While demand continues to soar, growth in capacity hasn't quite kept pace. May 2024 saw a 6. 7% increase in available cargo tonne-kilometers (ACTKs) compared to the previous year. This disparity between surging demand and slower capacity expansion has resulted in persistently high load factors, indicating a market operating close to capacity.

The positive performance is attributed to a confluence of factors. Trade growth continues on an upward trajectory, fueled by a recovering global economy. E-commerce, a major driver of air cargo in recent years, remains a significant contributor, with online retail sales showing no signs of abating. Additionally, ongoing constraints in maritime shipping, such as port congestion and limited availability of containers, have further bolstered demand for air freight.

Regionally, the good news is widespread. European carriers witnessed a significant 17. 2% year-on-year increase in air cargo demand for May. Intra-European routes experienced even more impressive growth, with a 25. 6% rise compared to May 2023. This marks the fifth consecutive month of double-digit growth for intra-European air cargo, reflecting a robust internal market within the continent. Notably, the Europe-Middle East route also saw a substantial demand increase of 33. 8%.

While the overall outlook for air cargo remains optimistic, there are potential headwinds to consider. The recent announcement by the United States of stricter conditions on e-commerce deliveries originating from China could dampen growth, particularly on the critical Asia-North America trade lane. Increased costs and potential delays for shipments under $800 may deter US consumers and pose challenges for air cargo operators on this route.

Despite this near-term uncertainty, the air cargo industry is currently experiencing a period of sustained growth. The confluence of robust trade, booming e-commerce, and capacity constraints in maritime shipping has created a favorable environment for air freight. With global economic recovery continuing, the air cargo sector is well-positioned to maintain its momentum in the coming months.