**Air Cargo Demand Rises 6% in May Amid Middle East Disruption**
Global air cargo demand experienced a significant increase of 6% year-on-year in May 2023, according to the International Air Transport Association (IATA). This growth is attributed to stronger trade and manufacturing activities, although ongoing disruptions related to the conflict in the Middle East have notably impacted carriers operating in that region.
The total demand for air cargo, measured in cargo tonne-kilometres (CTK), rose by 6% compared to May 2022, while international operations saw an increase of 6.5%. In contrast, capacity growth, measured in available cargo tonne-kilometres (ACTK), was more modest at 1.9% overall and 2.8% for international operations. This discrepancy between demand and capacity has resulted in a rise in the global cargo load factor, which increased by 1.8 percentage points to reach 46.3%.
IATA's Director General, Willie Walsh, highlighted the year-on-year growth in air cargo demand, noting that regions such as Africa, Asia-Pacific, Europe, and North America all reported above-trend growth. However, Middle Eastern carriers faced a significant challenge, recording a contraction of 8.9% year-on-year due to the ongoing effects of the war, which has disrupted various aspects of the air cargo industry.
Despite these challenges, Walsh expressed cautious optimism regarding the future of air cargo, pointing to positive macroeconomic indicators such as increasing trade and manufacturing output. Airlines have been adjusting their operations to align with changing demand patterns and supply chain requirements. Additionally, improvements in yield growth and higher load factors are helping carriers manage the rising costs of fuel, although Walsh cautioned that the year remains difficult, particularly for those affected by the instability in the Middle East.
Among the regions, Africa demonstrated the strongest performance, with airlines reporting a 13.3% increase in air cargo demand in May, while capacity rose by only 1.3%. This led to a notable increase in the region's cargo load factor, which climbed by 5 percentage points to 46.9%. North American carriers also performed well, with demand rising 10.5% year-on-year and capacity increasing by 2.4%, resulting in a cargo load factor that improved by 3 percentage points to 41%.
In the Asia-Pacific region, which holds the largest share of the global air cargo market, demand grew by 8%, with capacity up by 5.1%. This region accounted for 35.8% of global industry CTKs in 2023. European carriers saw a demand increase of 6.7% in May, with capacity rising by 2.2%. Europe achieved the highest regional cargo load factor at 53.9%, following an annual increase of 2.3 percentage points.
Conversely, Middle Eastern carriers faced the weakest performance, with demand declining by 8.9% and capacity down by 9.2%. The region's cargo load factor remained relatively stable, increasing slightly by 0.2 percentage points to 46.5%. Latin American and Caribbean carriers reported more modest growth, with demand up 1.9% and capacity rising by 5.6%, resulting in a decrease in the cargo load factor by 1.2 percentage points to 34.8%.
IATA noted that the broader operating environment remains mixed. Global trade has risen by 5% year-on-year, marking 25 consecutive months of growth, while manufacturing activity continues to be supportive. The Global Manufacturing Output Purchasing Managers’ Index rose to 53.5 in May, indicating expansion, although the New Export Orders Index fell below the growth threshold to 49.6.
Fuel prices continue to exert pressure on the industry. While jet fuel prices decreased by 16.3% month-on-month in May, they remain 93.5% higher than the same period last year.
Performance across major trade lanes varied significantly. The Asia-North America corridor led growth with demand surging by 19.9%, marking the fourth consecutive month of expansion. The Africa-Asia route saw a 14.1% increase, extending its growth streak to 11 months. The Europe-Asia route grew by 10%, maintaining a remarkable 39 consecutive months of expansion, while intra-European air cargo increased by 11.5%. However, trade routes linked to the Gulf region faced severe challenges, with demand on the Europe-Middle East lane dropping by 19.8% and the Middle East-Asia route declining by 16.5%, both experiencing their third consecutive month of contraction. The Europe-North America corridor saw minimal growth, rising by just 0.4%, while intra-Asia traffic increased by 5.5%, continuing its growth streak to 31 months.
Overall, while May showed a positive trend in global air cargo demand, the ongoing geopolitical tensions in the Middle East present significant challenges for the industry moving forward.