Newly released International Air Transport Association (IATA) global air cargo data has shown a drop in demand in March 2022.
According to IATA, the effects of the Coronavirus Omicron variant in Asia, the Russia-Ukraine war and a challenging operating backdrop contributed to the decline. Global demand, measured in cargo tonne-kilometres (CTKs), fell 5.2% compared to March 2021 (-5.4% for international operations).
Capacity was 1.2% higher than March 2021 (+2.6% for international operations). While an increase, it remains a significant decline when compared with the 11.2% year-on-year growth in February, IATA noted. Asia and Europe experienced the largest falls in capacity.
IATA highlighted several factors to take into account. Firstly, the war in Ukraine has led to a fall in cargo capacity as several airlines based in Russia and Ukraine were key cargo players. Sanctions against Russia have caused disruptions in manufacturing, while rising oil prices are having a negative economic impact, including raising costs for shipping.
New export orders, a leading indicator of cargo demand, are now shrinking in all markets except the US. The Purchasing Managers’ Index (PMI) indicator tracking global new export orders fell to 48.2 in March. This was the lowest since July 2020, according to IATA.
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) and supply chain disruptions amplified by the war in Ukraine.
Finally, general consumer price inflation for the G7 countries was at 6.3% year-on-year in February 2022, the highest since 1982.
“Air cargo markets mirror global economic developments. In March, the trading environment took a turn for the worse. The combination of war in Ukraine and the spread of Omicron in Asia have led to rising energy costs, exacerbated supply chain disruptions, and fed inflationary pressure. As a result, compared to a year ago, there are fewer goods being shipped – including by air.
“Peace in Ukraine and a shift in China’s COVID-19 policy would do much to ease the industry’s headwinds. As neither appears likely in the short term, we can expect growing challenges for air cargo just as passenger markets are accelerating their recovery,” said Willie Walsh, IATA director general.
