THE decline in air cargo demand will slow to 3.8 per cent this year, but airline cargo revenues will tumble 33 per cent to US$142.3 billion as a surge in passenger flights ushers in more capacity and global trade slows, according to a forecast by the International Air Transport Association (IATA), reports New York's FreightWaves.
More disconcerting is that cargo volumes, currently 5.3 per cent below weak 2019 levels, will end the year 5.5 per cent below the four-year benchmark at 240 million cargo tonne kilometres (CTK) - an acknowledgement that market conditions will worsen slightly in the second half of the year when shipping volumes traditionally peak.
iata estimated that airlines will carry 63.7 million tonnes this year compared to 67.8 million tonnes in 2019. Still, cargo revenues will remain well above the pre-pandemic level of $100 million as labour shortages and fuel expenses lead carriers to charge more for their services.
The projected 3.8 per cent decline in air freight shipping is an improvement from the eight per cent reduction last year. But some analysts note that temporary signs of stabilization likely have more to do with easier 2022 comparisons when the Chinese economy was still closed down, rather than with any demand improvement.
Overall, IATA projected airlines will turn a small profit of $9.8 billion this year - more than double the previous prediction in December - on a razor-thin margin of 1.2 per cent. About 4.35 billion people are expected to travel in 2023, drawing close to the 4.54 billion who flew the year before Covid struck.
Total revenues are expected to grow 9.7 per cent year over year to $803 billion, closing in on the 2019 level. This is the first time that industry revenues will top the $800 billion mark since 2019 ($838 billion). Expense growth is expected to be contained to an 8.1 per cent annual increase, the trade association said.
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More disconcerting is that cargo volumes, currently 5.3 per cent below weak 2019 levels, will end the year 5.5 per cent below the four-year benchmark at 240 million cargo tonne kilometres (CTK) - an acknowledgement that market conditions will worsen slightly in the second half of the year when shipping volumes traditionally peak.
iata estimated that airlines will carry 63.7 million tonnes this year compared to 67.8 million tonnes in 2019. Still, cargo revenues will remain well above the pre-pandemic level of $100 million as labour shortages and fuel expenses lead carriers to charge more for their services.
The projected 3.8 per cent decline in air freight shipping is an improvement from the eight per cent reduction last year. But some analysts note that temporary signs of stabilization likely have more to do with easier 2022 comparisons when the Chinese economy was still closed down, rather than with any demand improvement.
Overall, IATA projected airlines will turn a small profit of $9.8 billion this year - more than double the previous prediction in December - on a razor-thin margin of 1.2 per cent. About 4.35 billion people are expected to travel in 2023, drawing close to the 4.54 billion who flew the year before Covid struck.
Total revenues are expected to grow 9.7 per cent year over year to $803 billion, closing in on the 2019 level. This is the first time that industry revenues will top the $800 billion mark since 2019 ($838 billion). Expense growth is expected to be contained to an 8.1 per cent annual increase, the trade association said.
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