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July air cargo demand stable, but capacity remains constrained by Covid

THE International Air Transport Association (IATA) has reported that global demand, measured in cargo ton kilometres (CTKs), fell by 13

02 September 2020 - 19:00

THE International Air Transport Association (IATA) has reported that global demand, measured in cargo ton kilometres (CTKs), fell by 13.5 per cent in July (-15.5 per cent for international operations) compared to the previous year. That is a modest improvement from the 16.6 per cent year-on-year drop recorded in June.

Global capacity, measured in available cargo ton-kilometres (ACTKs), shrank by 31.2 per cent in July (-32.9 per cent for international operations) compared to the previous year. This is a small improvement from the 33.4 per cent year-on-year drop in June.



Belly capacity for international air cargo shrank by 70.5 per cent in July compared to the previous year owing to the withdrawal of passenger services amid the COVID-19 pandemic. This was partially offset by a 28.8 per cent increase in capacity through expanded use of freighter aircraft.



Economic activity continued to recover in July reflected in the performance of the Purchasing Managers' Index (PMI), an indicator of economic health in the manufacturing sector.



The PMI tracking global manufacturing output returned to above 50, consistent with month-to-month growth in output. 'Economic indicators are improving, but we have not yet seen that fully reflected in growing air cargo shipments.' said IATA.



Asia-Pacific airlines saw demand for international air cargo fall by 15.3 per cent in July 2020 compared to the same period a year earlier. After a robust initial recovery in May, month-on-month growth seasonally-adjusted demand has softened. International capacity decreased 32 per cent.



North American carriers reported a single digit fall in international cargo demand of 5.4 per cent year-on-year in July. The stronger performance is due in part to strong demand on the transpacific, Asia-North America route, reflecting e-commerce demand for products manufactured in Asia. International capacity decreased 30.9 per cent.



European carriers reported a 22.4 per cent annual drop in international cargo volumes in July. This was a slight improvement from June's performance of -27.6 per cent. Demand on most key trade lanes to / from the region remained weak. The large Europe-Asia market was down 20 per cent year on year in July. International capacity decreased 37.4 per cent.



Middle Eastern carriers reported a decline of 14.9 per cent in year-on-year international cargo volumes in July, an improvement from the 19 per cent fall in June. Seasonally-adjusted demand grew 7.2 per cent month to month in July-the strongest of all regions.



This recovery was driven by the aggressive operational strategies of some of the region's carriers. International capacity decreased 27.1 per cent in the most resilient of all regions.



Latin American carriers posted a 32.1 per cent drop in year-on-year international demand in July, down from a 28.6 per cent decline in June. International capacity decreased 44.5 per cent.



The drop in both demand and capacity was the most severe of all regions. The Covid crisis is particularly challenging at present for airlines based in Latin America owing to strict lock-down measures.



IATA also announced that passenger demand in July (measured in revenue passenger kilometres or RPKs), continued at critically low levels - 79.8 per cent below July 2019 levels. This was somewhat better than the 86.6 per cent year-on-year decline recorded in June, primarily driven by domestic markets, most notably Russia and China.



'The crisis in demand continued with little respite in July. With essentially four in five air travelers staying home, the industry remains largely paralyzed. Governments reopening and then closing borders or removing and then re-imposing quarantines does not give many consumers confidence to make travel plans, nor airlines to rebuild schedules,' said IATA director general and CEO Alexandre de Juniac.


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