Middle Eastern carriers see 1.4% year-on-year increase in cargo volumes

Muscat: Middle Eastern carriers experienced a 1.4 percent year-on-year increase in cargo volumes in August 2023, according to a new report.

“This was an improvement from the previous month’s performance (-0.1 percent), the International Air Transport Association (IATA) said in its latest data for global air cargo markets for August 2023.

“The demand on the Middle East–Asia market has been trending upward in the past three months, expanding its year-on-year growth from 1.8 percent in June to 3.5 percent in August,” the IATA report said. “Capacity increased 15.7 percent compared to August 2022,” the report further added.

IATA in its report said that global year-on-year air cargo demand grew for the first time in 19 months.
Global demand, measured in cargo tonne-kilometres (CTKs), increased by 1.5 percent compared to August 2022 levels (1.2 percent for international operations).

Capacity, measured in available cargo tonne-kilometres (ACTKs), was up 12.2 percent compared to August 2022 (11.8 percent for international operations), the IATA report said. “This was largely related to belly capacity which rose 30 percent year-on-year as airlines ramped up operations to meet peak-northern summer travel season demand,” the report further said.

“Air cargo demand grew by 1.5 percent over the previous August. This is the first year-on-year growth in 19 months, so it is certainly welcome news. But it is of a low 2022 base and market signals are mixed,” said Willie Walsh, IATA’s Director General.

“Looking ahead, while many uncertainties remain, we can take some optimism from PMI data moving towards positive territory. This is particularly significant as we head into air cargo’s traditional peak year-end season,” he further added.

August regional performance
Asia-Pacific airlines saw their air cargo volumes increase by 4.9 percent in August 2023 compared to the same month in 2022, the IATA report said. This was a significant performance improvement compared to July (+2.3 percent). Carriers in the region benefited from growth on two major trade lanes: Europe-Asia (up from 3.1 percent in July to 8.8 percent in August) and Middle East-Asia (up from 2.7 percent in July to 3.5 percent in August).

Additionally, the within-Asia trade lane also performed better in August, with international CTKs contracting by 4.7 percent compared to the 9.7 percent annual decline in July. Available capacity for the region’s airlines increased by 28.5 percent compared to August 2022 as more belly capacity came online from the passenger side of the business.

North American carriers saw their air cargo volumes decrease by 1.2 percent. This was a performance improvement compared to July (-5.4 percent). Carriers in the region benefited from a slight improvement in growth on two major trade lanes: North America – Europe (2.9 percent annual contraction in August,1.2 percentage points better than in July) and Asia-North America (declined 4.2 percent in August compared to 4.4 percent decrease in July). Capacity increased 2.7 percent compared to August 2022.

European carriers saw their air cargo volumes decline by 0.2 percent in August compared to the same month in 2022. This was, however, an improvement in performance versus July (-1.0 percent). Volumes saw an increase due to the aforementioned Europe–Asia performance and a small increase in the Middle East-Europe markets by 0.4 percent. Capacity increased 3.6 percent in August 2023 compared to 2022.
The IATA report further said that in August, both the manufacturing output Purchasing Managers Index or PMI (49.4) and new export orders PMI (47.0) saw a slight improvement to the previous month. They remained, however, below the critical threshold represented by the 50 mark, indicating a continuing, if slower, annual decline in global manufacturing production and exports.

Global cross-border trade contracted for the fourth month in a row in July, decreasing 3.2 percent year-over-year. This reflects the cooling demand environment and general macroeconomic conditions.

Inflation saw a mixed picture in August, with an increase in US consumer prices for the second month in a row. Meanwhile, in Europe and Japan, consumer and producer prices fell. In China, which is fighting deflationary pressures, consumer prices rose.