GLOBAL air cargo markets in June 2023 the smallest year-on-year contraction in demand since February last year, according to the International Air Transport Association.

IATA reported a 3.4% decrease in global demand (measured in cargo tonne kilometres) in June 2023 compared with the same month last year.

For the half year, demand slid 8.1% compared to the January-June period of 2022. However, demand in June was 2.4% below June 2019 (pre-pandemic) levels.

Capacity rose 9.7% compared with June last year, which was a slower rate compared to double-digit growth recorded between March and May.

IATA said this reflected strategic capacity adjustments airlines are making amid a weakened demand environment.

Another factor that influenced air cargo demand in June was a 2.4% decline in global cross-border trade in May this year, reflecting a cooling demand environment and challenging macroeconomic conditions.

The difference between the annual growth rates of air cargo and the global goods trade narrowed to -2.6% in May, representing the smallest gap since January 2022.

However, IATA said the gap suggests that air cargo continues to suffer more than container cargo from the slowdown in global trade.

“We remain hopeful that the difficult trading conditions for air cargo will moderate as inflation eases in major economies,” IATA director general Willie Walsh said.

“This, in turn, could encourage the central banks to loosen the money supply, which could stimulate greater economic activity.”

Asia-Pacific airlines saw air cargo volumes decrease by 3.6% in June 2023 compared with the same month last year.

IATA said this was also a decline compared to May (-2.5%), mainly owing to weak demand on within-Asia markets, although the Asia-North America trade lane saw improved performance.

Available capacity in the region increased by 24.4% compared with June 2022.

In North America, carriers experienced a 6.5% decrease in total cargo volumes in June this year compared with the same month in 2022, marking the fourth consecutive month of the region having the weakest performance.

IATA noted this was, however, an improvement compared with May (-8.6%). Capacity increased 0.7% compared with June 2022.

European carriers saw a 2.8% decrease in cargo volumes in June 2023, compared with the same month in 2022. Capacity increased 4.4% compared to June 2022.

In the Middle East, carriers posted a 0.5% increase in cargo volumes in June 2023 compared with the same month in 2022.

IATA said this was a strong turnaround from the 2.9% year-on-year decline registered in May.

Capacity rose 11.1% for the month, and both Middle East-Asia and Middle East-Europe route areas saw annual growth.

Latin American carriers had strongest performance in June 2023, with a 7.3% increase in cargo volumes compared with June 2022. This was an improvement compared to May (+3.8%).

Capacity for Latin American airlines in June was up 15.4% over the same month in 2022.

And African airlines posted a 2.8% decrease in demand compared to June 2022. This was a decline in performance compared to the previous month (-1.9%).

Capacity in June was down 3.7% compared to the same month in 2022.