Air cargo demand growth continues but pressure on capacity rising: IATA

September 30, 2021: The International Air Transport Association (IATA) released August 2021 data for global air cargo markets showing that pressure on capacity is rising while global demand, measured in cargo tonne-kilometres (CTKs), was up 7.7 percent compared to August 2019 (8.6 percent for international operations) and the overall growth remains strong compared to the long-term average growth trend of around 4.7 percent.

“As comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of Covid-19, unless otherwise noted, all comparisons below are to August 2019 which followed a normal demand pattern,” the release said.

The pace of growth slowed slightly compared to July, which saw demand increase 8.8 percent (against pre-Covid-19 levels). Cargo capacity recovery paused in August, down 12.2 percent compared to August 2019 (‑13.2 percent for international operations). In month-on-month terms, capacity fell by 1.6 percent – the largest drop since January 2021.

“The August manufacturing output component of the Purchasing Managers Indices (PMIs) was 51.9, indicating a short-term boost to demand if those orders are shipped by air. This was a decline from 54.4 in July. The August new export orders component of the PMIs was favorable for air cargo, despite being less supportive than in the previous months. Expansion continued at the global level, however, there was contraction in emerging economies.

The inventory-to-sales ratio remains low ahead of the peak year-end retail season. This is positive for air cargo, however further capacity constraints put this at risk.

Willie Walsh, IATA’s Director-General, said, “Air cargo demand had another strong month in August, up 7.7 percent compared to pre-Covid levels. Many of the economic indicators point to a strong year-end peak season. With international travel still severely depressed, there are fewer passenger planes offering belly capacity for cargo. And supply chain bottlenecks could intensify as businesses continue to ramp up production.” 

Asia-Pacific airlines saw their international air cargo volumes increase 3.0 percent in August 2021 compared to the same month in 2019.This was a slowdown in demand compared to the previous month’s 4.4 percent expansion. Demand is being affected by an easing in growth momentum in key activity indicators in Asia, and by congested supply chains especially on Within Asia and Europe-Asia routes. International capacity is significantly constrained in the region, down 21.7 percent vs. August 2019.