May air cargo shows slight pickup amid continuing capacity crunch ⁠— IATA

May air cargo shows slight pickup amid continuing capacity crunch ⁠— IATA. (Photo by Bloomberg)

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KUALA LUMPUR (June 30): The global air freight market in May showed a slight improvement in the air cargo market but capacity remained unable to meet demand as a result of the loss of belly cargo operations on passenger aircraft that had been parked, said the International Air Transport Association (IATA).

The trade association for the world’s airlines said global demand, measured in cargo tonne-kilometres (CTKs), fell by 20.3% in May, compared to the previous year. 

"That was an improvement from the 25.6% year-on-year drop recorded in April,” it said in a statement today.

Global capacity, measured in available CTKs (ACTKs), shrank by 34.7% in May, compared to the previous year, a slight deceleration from the 41.6% year-on-year drop in April.

The IATA said belly capacity of international air cargo declined by 66.4% in May, compared to the previous year, due to the withdrawal of passenger services amid the Covid-19 crisis, a slight improvement from the 75.1% year-on-year decline in April.  

This was partially offset by a 25.2% increase in capacity through expanded use of freighter aircraft.

Meanwhile, the IATA said the cargo load factor rose 10.4 percentage points in May, a slight decrease from the 12.8-percentage-point rise in April.

However, it said the extent of the increase suggested that there was still pent-up demand for air cargo which cannot be met due to continued grounding of many passenger flights.

"Global export orders continued to fall but at a slower pace. The Purchasing Managers' Index (PMI) tracking new manufacturing export orders improved from the trough seen in April despite remaining in contractionary territory," it said.

Director-general and chief executive officer (CEO) Alexandre de Juniac said the gap between demand and capacity showed the challenge in finding the space on the aircraft still flying to get goods to market.

“For that, prospects for air cargo remain stronger than those for the passenger business but the future is very uncertain.

“Economic activity was picking up from April lows as some economies were unlocked. But predicting the length and depth of the recession remains difficult,” he added.