International Air Transport Association (IATA) data for global air cargo markets in July 2023 showed that the trend for growth since February was continuing. Although demand was flat compared to the previous year – but given the decline in global trade volumes and the continued concerns over China’s economy, any improvement on the performance against previous months is still significant.

Global Demand Levels

Global demand tracked at 0.8% below July 2022 levels but this still represented significant improvement on the previous month’s performance, which stood at -3.4%. Meanwhile, capacity was up by 11.2% compared to July 2022.

Several operating environment factors need to be considered. In July, the Purchasing Managers Index (PMI) for both manufacturing output and new export orders were below the critical threshold. This indicates a decline on global manufacturing production and exports.

Global cross-border trade also contracted for the third consecutive month in June. This decrease of 2.5% year-over-year reflects the challenging macroeconomic conditions and the cooling demand environment. However, the gap between air cargo annual growth rates and the global goods trade narrowed. What’s more, although air cargo growth is still lagging world trade, the gap is now the narrowest it has been since January 2022. The global inflation picture was a mixed picture in July. The US consumer prices picked up for the first time in over a year. However, in China, there were signals of a deflationary economy as both producer and consumer prices fell.

Asia’s Air Cargo Demand

Asia-Pacific Airlines saw air cargo volumes increased by 2.7% in July 2023 compared to July 2022. This represented a significant improvement on the previous month (-3.3%). Carriers across the region benefitted from growth on three of its major trade lanes: Europe-Asia, Middle East-Asia, and Africa-Asia. Available capacity across the region increased by 26% compared to July 2022. This was mainly a result of increased belly capacity coming online from the passenger side of the business.

Demand in North America

The weakest performance of all the regions was seen by carriers in North America. A 5.2% decrease in cargo volumes was seen in July 2023 compared to the same month in 2022. This marked the fifth consecutive month where North America posted the weakest performance figures. However, July saw a slight improvement on the previous month. Traffic declined on transatlantic routes by 4.3% in July. Meanwhile, capacity increased by 0.5% compared to July 2022.

European and Middle-Eastern Demand

European carriers saw a decline of 1.5% in their air cargo volumes in July compared to July 2022. This was an increase on the previous month (-3.2%). Capacity increased by 5.3% compared to July 2022. Middle Eastern carriers saw a 1.5% year-on-year increase in cargo volumes in July 2023. This continues the upward trend seen in demand on Middle East-Asia routes. Capacity was also up in the region – by 17.1% compared to July 2022.

Air Cargo Demand In Latin America and Africa

In Latin America, a 0.4% increase in cargo volumes compared to July 2022. This represented a drop in performance compared to the previous month (2.2%). Capacity in July was up by 10% compared to July 2022.

Overall, the strongest performance was seen by African airlines with a 2.9% rise in cargo volumes compared to July 2022. Africa-Asia routes saw significant growth in cargo demand growth.

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