Author: Admin

21 / 03 / 2024

By Damian Brett

There had been much speculation in air cargo about whether the strong demand growth reported over the first two months of the year would continue past the Lunar New Year holiday but it appears the buoyant market conditions are so far continuing, although at a slightly lower level.

Figures released last week by data provider WorldACD appear to show that demand is continuing to improve in March, albeit at a lower level as the urgency to move cargo ahead of the Lunar holiday has eased.

The data provider’s figures for the two weeks ending March 10 (week 10) show that demand was up by 4% year on year on a global basis.

“Overall global demand has broadly stabilised following a strong return of Asia Pacific volumes since the Lunar New Year dip in early February,” said WorldACD in its latest market analysis.

Many had wondered whether the double-digit demand improvements registered over the first two months of the year were the result of the Red Sea shipping crisis combined with the usual pre-Lunar New Year rush.

On a week-by-week basis, WorldACD said that total worldwide tonnages in week 10 were “broadly flat” compared with the previous week, after recovering by 3% in week 9 and by 14% the previous week and following an 11% drop around the LNY holiday week.

The improvements are in part down to an ongoing increase in sea-air demand, as forwarders and shippers look to avoid elongated shipping times, and a rise in e-commerce demand.

“Air cargo tonnages from Dubai to Europe are continuing to boom,” the analyst said.

The company’s figures show that Dubai-Europe tonnages for the week ending March 10 were at three times the level (205%) recorded this time last year.

Other sea-air hubs also continued to record strong demand. Bangkok-Europe demand was up by more than 30% year on year and Colombo-Europe tonnages were up 20%.

“Certain key Asia-Europe sea-air hubs such as Dubai, Colombo and Bangkok have experienced exceptionally high air cargo demand to Europe since the start of this year, in large part linked to the disruptions to Asia-Europe container shipping caused by the attacks on vessels in the Red Sea,” WorldACD added.

E-commerce demand also continues to surge. Reporting its latest figures Cathay Cargo said that “e-commerce continues to drive demand out of Hong Kong”.

The growing impact of e-commerce demand on the air cargo market was highlighted at the recent IATA World Cargo symposium, with Tom Owen, director of cargo, Cathay Cargo, saying that around 50-60% of the airline’s business is now e-commerce, which is “up from about 30% not so long ago”.

And the trend looks set to continue. Ludwig Hausmann, senior partner at consulting firm McKinsey said that in 2017, the cross-border e-commerce share of total air cargo volume was 10%.

In 2022, this had jumped to 20% and in 2027 this percentage is expected to be between 25-30%.

“This is a fundamental shift in how this industry operates. And we’re not seeing a decline. It’s likely going to level out at a third or so,” Hausmann said.

12 March 2024

Hong Kong –  The International Air Transport Association (IATA) reviewed progress in digitalization, safety and sustainability at the opening of the IATA World Cargo Symposium with the aim of accelerating progress on these critical priorities.

“Air cargo volumes are now firmly back to pre-pandemic levels. The challenge now is to ensure that air cargo growth is efficient, safe and aligned with achieving net zero carbon emissions by 2050. Through the hard work of the air cargo industry, the building blocks are in place to significantly accelerate progress in all these areas,” said Brendan Sullivan, IATA’s Global Head of Cargo at the World Cargo Symposium (WCS), which opened in Hong Kong, today.

Digitalization

“The biggest opportunity for the air cargo industry is digitalization. This has not happened as fast as any of us would have liked. But progress is real. Inefficient paper-based, manual processes are being replaced with digital solutions in all aspects of cargo operations from tracking to customs clearance. That’s a fact. And it’s making international trade more efficient. Our call to action is clear: Governments must consistently implement global standards, supply chain partners need to collaborate to overcome shared challenges, and the entire industry must align to ensure a unified and effective approach to digitalization,” said Sullivan.

Three areas were highlighted to illustrate progress:

•    Seamless sharing of digital information: The adoption of the ONE Record standard is enabling efficient data exchange throughout the supply chain. The aim is for all IATA members to achieve ONE Record capability by January 2026. Cathay Cargo and Lufthansa Cargo have already met this target. And all major airline IT platform providers have pledged to attain ONE Record capability to support this transition.

•    Digitalization of customs and trade facilitation processes: Among countries already implementing, Brazil’s use of IATA’s digital standards has cut cargo release times from 5 days to just 5 hours, potentially reducing manual processing by up to 90%. And the EU, UAE and Canada recognized the value of accurate data sharing across the air cargo supply chain and will adopt pre-loading advance cargo information systems by the end of 2024. The US was the early-adopter of this in 2019.

•    Shipment tracking: The updated IATA Interactive Cargo Guidance offers a unified framework, enabling tracking devices to ensure the quality and accuracy of conditions for time and temperature-sensitive goods. This is critical to facilitate growing demands for real-time shipment tracking by e-commerce and pharmaceutical trade.

Safety

“Safety is critical to air cargo’s success. Last year the industry’s safety record reached new heights. Among the 38 million flights in 2023 there were 30 accidents, just one of which was fatal.  A good safety record is earned every day.  For air cargo that means continuing to put special emphasis on the handling of dangerous goods, and in particular lithium batteries,” said Sullivan.

Four areas were noted with respect to the safe transport of lithium batteries:

•    A test standard for fire retardant shipping containers is ready for approval.

•    Over 90 airlines are now sharing dangerous goods incident data through the IATA Global Aviation Data Management (GADM) program.

•    Guidance was published for operators to recognize and mitigate the risks from inexperienced e-commerce shippers using the postal system.

•    An update to Annex 18 of the Chicago Convention clarifying responsibilities for the handling of dangerous goods and their effective regulation is now ready for global adoption by states.

Underpinning the safe handling of dangerous goods by air cargo operators is the IATA Dangerous Goods Regulations (DGR). Importantly IATA renewed and strengthened its partnership with ICAO to publish this critical document in early 2024. And it is supported by numerous innovative tools including the Connect API and DG AutoCheck which are gaining industry traction as the benefits of automating previously paper-based processes are recognized.

Sustainability

Airlines and shippers have given strong demand signals for Sustainable Aviation Fuels (SAF) which are expected to account for some 65% of the needed mitigation to achieve net zero carbon emissions in 2050.

“There is no shortage of demand signals from airlines and shippers to use SAF. The problem remains a shortage of supply. As we saw with the introduction of solar and wind generation for electricity, production incentives are the way forward. Japan is a good example. The government has put a 10% production mandate on fuel suppliers. Singapore has also recently taken steps to create a Sustainable Air Hub with a view to foster SAF production and use. The US is another with tax credits embedded in the Inflation Reduction Act that are resulting in increased production. We need more governments to follow these positive examples,” said Sullivan.

Additionally:

•    CO2 Connect for cargo, a precise tool for calculating emissions from operations, will be launched later this year.

•    The IATA Environmental Assessment (IEnvA) is supporting 60 organizations from the industry, including airlines, airports, and cargo handlers, to demonstrate how their sustainability actions are positively impacting the industry.

“For any industry to survive, change is essential. And constant change for anyone is never easy. But it is absolutely worth it when that change delivers 60 million tonnes of cargo that powers economies, improves peoples’ lives and genuinely makes our world a better place. And that is what inspires us to make our industry more efficient, ever safer and on target for net zero carbon emissions by 2050,” said Sullivan.

5 March 2024    

Geneva –  The International Air Transport Association (IATA) released data for January 2024 global air cargo markets indicating a strong start to 2024.

•    Total demand, measured in cargo tonne-kilometers (CTKs*), increased by 18.4% compared to January 2023 levels (19.8% for international operations). This significant upturn marks the highest annual growth in cargo tonne-kilometers (CTKs) since the summer season of 2021.

•    Capacity, measured in available cargo tonne-kilometres (ACTKs), was up 14.6% compared to January 2023 (18.2% for international operations). This was largely related to the growth in belly capacity. International belly capacity rose 25.8% year-on-year (YoY) on the strength of passenger markets.

“Air cargo demand was up 18.4% year-on-year in January. This is a strong start to the year. In particular, the booming e-commerce sector is continuing to help air cargo demand to trend above growth in both trade and production since the last quarter of 2023. The counterweight to this good news is uncertainty over how China’s economic slowdown will unfold. This will be on the minds of air cargo executives meeting in Hong Kong next week for the IATA World Cargo Symposium with an agenda focused on digitalization, efficiency and sustainability,” said Willie Walsh, IATA’s Director General.

Air cargo growth outpaced trade and production. Several factors in the operating environment should be noted:

•    Global cross-border trade increased by 1.0% in December compared to the previous month (-0.2% YoY).

•    In January, the manufacturing output Purchasing Managers’ Index (PMI) improved to 50.3, surpassing the 50 mark for the first time in eight months, indicating expansion. The new export orders PMI also saw an increase to 48.8, but remains below the critical 50 threshold, suggesting a continuing yet decelerating decline in global exports.

•    Inflation in major economies continued to ease from its peak in terms of Consumer Price Index (CPI) in January, reaching 3.1% in both the US and in the EU, and 2.1% in Japan. China’s CPI, however, indicated deflation for the fourth consecutive month, raising concerns of an economic slowdown. China’s negative inflation rate of -0.8% was the lowest since the Global Financial Crisis in 2009.

Air cargo market in detail – January 2024

 January 2024

(% year-on-year)             World share1     CTK        ACTK     CLF (%-pt)           CLF (level)

Total Market      100%     18.4%    14.6%    1.4%      45.7%

Africa    2.0%      17.0%    19.4%    -0.9%     43.1%

Asia Pacific          33.3%    24.6%    25.0%    -0.2%     44.6%

Europe 21.4%    16.4%    12.5%    1.9%      55.5%

Latin America     2.8%      13.4%    6.6%      2.1%      34.4%

Middle East        13.5%    25.9%    17.1%    3.1%      43.9%

North America  26.9%    9.3%      3.8%      2.2%      43.5%

1% of industry CTKs in 2023

January Regional Performance

Asia-Pacific airlines saw their air cargo volumes increase by 24.6% in January 2024 compared to the same month in 2023. This performance was above the previous month (+18.5%). Carriers in the region benefited from ongoing growth in international CTKs on three major trade lanes: Africa-Asia (+52.5%), Middle East-Asia (+29.5%) and Europe-Asia (+27.5%). Available capacity for the region’s airlines increased by 25.0% compared to January 2023 as more belly capacity came online from the passenger side of the business.

North American carriers had the weakest performance of all regions in January with a 9.3% increase (YoY) in cargo volumes. This was an improvement in performance compared to December (2.0%). Carriers in the region benefitted from growth on the North America-Asia trade lane (+17.1%) and North America-Europe trade lane (+3.5%). Capacity increased by 3.8% compared to January 2023.

European carriers saw their air cargo volumes increase by 16.4% in January compared to the same month in 2023. This was a stronger performance than in December (+8.6%). Carriers in the region benefitted from the strong growth in international CTKs in the within Europe market (+18.4%) and the Europe – Asia route (+27.5%).  Gains made from the significant expansion in the Middle East-Europe trade lane (+46.1%) also benefited carriers in the region. Capacity increased 12.5% in January 2024 compared to the same month in 2023.

Middle Eastern carriers had the strongest performance in January 2024, with a 25.9% year-on-year increase in cargo volumes. This was a significant improvement from the previous month’s performance (+18.3%). Carriers in the region benefited from growth in the Middle East–Asia (+29.5%) and Middle East–Europe markets (+46.1%). Capacity increased 17.1% compared to January 2023.

Latin American carriers experienced a 13.4% increase in cargo volumes compared to January 2023, a notable increase compared to the previous month’s gain (+6.4%). Capacity in January was up 6.6% compared to the same month in 2023.

African airlines saw their air cargo volumes increase by 17.0% in January 2024, much improved compared to December’s performance (-1.2%). Carriers in the region benefitted from strong growth on the Africa-Asia trade lane. Capacity in January was 19.4% above January 2023 levels.

Cologne: The European Union Aviation Safety Agency (EASA) and the International Air Transport Association (IATA) announced the conclusions of a workshop jointly hosted at EASA’s headquarters to combat incidents of GNSS spoofing and jamming.

The workshop’s high-level conclusion was that interference with satellite-based services that provide information on the precise position of an aircraft can pose significant challenges to aviation safety. Mitigating these risks requires short-, medium- and long-term measures, beginning with the sharing of incident information and remedies.

“GNSS systems offer tremendous advantages to aviation in increasing the safety of operations in a busy shared airspace,” said EASA Acting Executive Director Luc Tytgat. “But we have seen a sharp rise in attacks on these systems, which poses a safety risk. EASA is tackling the risk specific to these new technologies. We immediately need to ensure that pilots and crews can identify the risks and know how to react and land safely. In the medium term, we will need to adapt the certification requirements of the navigation and landing systems. For the longer term, we need to ensure we are involved in the design of future satellite navigation systems. Countering this risk is a priority for the Agency.”

“Airlines are seeing a significant rise in incidents of GNSS interference. To counter this, we need coordinated collection and sharing of GNSS safety data; universal procedural GNSS incident guidance from aircraft manufacturers; a commitment from states to retain traditional navigation systems as backup in cases where GNSS are spoofed or jammed. In actioning these items, the support and resources of EASA and other governmental authorities are essential. And airlines will be critical partners. And whatever actions are taken, they must be the focal point of the solution as they are the front line facing the risk,” said Willie Walsh, IATA’s Director General.

Measures agreed by the workshop to make Positioning, Navigation and Timing (PNT) services provided by GNSS more resilient, include: 

-Reporting and sharing of GNSS interference event data. In Europe, this would occur through the European Occurrence Reporting scheme and EASA’s Data4Safety programme. As this is a global problem, it is important, for a better and complete understanding, to join all the information available from reports by connecting the databases such as IATA’s Flight Data Exchange (FDX), or EUROCONTROL’s EVAIR.  This topic will be included in the discussions among all interested stakeholders, which will be launched following this workshop.

-Guidance from aircraft manufacturers. This will ensure that aircraft operators are well equipped to manage jamming and spoofing situations, in alignment with EASA’s Safety Information Bulletin (SIB 2022-02 R2).

-Alerting: EASA will inform the relevant stakeholders (airlines, air navigation service providers (ANSPs), manufacturing industry and airports) about attacks.

-Backup: Aviation must retain a Minimum Operational Network (MON) of traditional navigation aids to ensure that there is a conventional backup for GNSS navigation.

Background on ‘spoofing’ and ‘jamming’

In very recent years, Global Navigation Satellite System (GNSS) jamming and spoofing incidents have increasingly threatened the integrity of Positioning, Navigation, and Timing (PNT) services across Eastern Europe and the Middle East. Similar incidents have been reported in other locations globally. GNSS is a service based on satellite constellations such as the US Global Positioning System (GPS) and EU’s Galileo. ‘Jamming’ blocks a signal, whereas ‘spoofing’ sends false information to the receiver on board the aircraft.

These disruptions pose significant challenges to the broader spectrum of industries which rely on precise geolocation services, including aviation. Such attacks belong to the domain of Cybersecurity, safety threat for which EASA has developed a toolkit. The National Aviation Authorities (NAAs) in Europe had explicitly tasked EASA with taking measures to counter this risk.  

About the workshop

Participants in the workshop shared information on actual events experienced, to deepen the collective understanding of the perceived threat. There was wide appreciation from the attendees for the event and a shared understanding of the need to tackle this issue collectively in a timely fashion. Over 120 participants from airlines, manufacturers, system suppliers, ANSPs and institutions joined the in-person event, which was held in Cologne on January 25, 2024.

Geneva- The International Air Transport Association (IATA) and the International Civil Aviation Organization (ICAO) have extended their long-standing cooperation on setting and implementing global standards for the safe carriage of dangerous goods by air. An agreement to this effect was concluded at the IATA Executive Offices in Geneva during a visit by ICAO Secretary General Juan Carlos Salazar during which greater collaboration between the two organizations was discussed.

IATA began issuing guidance for the carriage of Dangerous Goods on aircraft back in 1956 and has been updating and devising standards ever since. A more formalized approach on this subject was taken at a regulatory level by the adoption of ICAO Annex 18 in January 1984. This outlines the broad principles for the international transport of dangerous goods. Technical Instructions For The Safe Transport of Dangerous Goods by Air amplify the basic provisions of Annex 18 and contain all the detailed instructions necessary for the safe international transport of dangerous goods by air. In addition, they provide guidance to States for inspection and oversight.

Based on the Technical Instructions agreed on at government level through ICAO, IATA works with the aviation industry to develop the applicable practical tools and operational recommendations. These are issued as the Dangerous Goods Regulations and are global standards applicable to the entire value chain – manufacturers, shippers, airlines, freight forwarders and ground handlers. These regulations include operator variations, supporting documents, tools, guidelines and notes which are essential for a practical, consistent approach to the safe acceptance, inspection, handling and carriage of dangerous goods on aircraft.

“The safe carriage of dangerous goods has become common practice, thanks to the strict adherence to global standards and guidelines. Today’s agreement ensures that dangerous goods will continue to be handled according to the highest globally applicable standards. To this effect, IATA will continue its advocacy work with key stakeholders to maintain a globally aligned, and practically focused approach to the regulated transport of dangerous goods. This will lead to more efficient and robust supply chains whilst upholding aviation’s number one priority of safety”, said Willie Walsh, IATA’s Director General.

10 January 2024                No: 2

Geneva – The International Air Transport Association (IATA) released data for November 2023 air travel performance indicating that air travel demand topped 99% of 2019 levels.

•    Total traffic in November 2023 (measured in revenue passenger kilometers or RPKs) rose 29.7% compared to November 2022. Globally, traffic is now at 99.1% of November 2019 levels.

•    International traffic rose 26.4% versus November 2022. The Asia-Pacific region continued to report the strongest year-over-year results (+63.8%) with all regions showing improvement compared to the prior year. November 2023 international RPKs reached 94.5% of November 2019 levels.

•    Domestic traffic for November 2023 was up 34.8% compared to November 2022. Total November 2023 domestic traffic was 6.7% above the November 2019 level. Growth was particularly strong in China (+272%) as it recovered from the COVID travel restrictions that were still in place a year ago. US domestic travel, benefitting from strong Thanksgiving holidays demand, reached a new high, expanding +9.1% over November 2019.

“We are moving ever closer to surpassing the 2019 peak year for air travel. Economic headwinds are not deterring people from taking to the skies. International travel remains 5.5% below pre-pandemic levels but that gap is rapidly closing. And domestic markets have been above their pre-pandemic levels continuously since April,” said Willie Walsh, IATA’s Director General.

Air passenger market in detail – November 2023

 November 2023

(% year-on-year)             World share1     RPK        ASK        PLF (%-pt)           PLF (level)

Total Market      100.0%  29.7%    28.6%    0.7%      81.8%

Africa    2.1%      20.3%    27.1%    -4.0%     70.4%

Asia Pacific          22.1%    80.1%    71.7%    3.8%      81.4%

Europe 30.8%    13.6%    13.5%    0.1%      83.7%

Latin America     6.4%      12.0%    9.1%      2.2%      84.4%

Middle East        9.8%      18.7%    18.4%    0.2%      77.7%

North America  28.8%    10.2%    11.3%    -0.8%     82.7%

1% of industry RPKs in 2022   

International Passenger Markets

Asia-Pacific airlines had a 63.8% rise in November traffic compared to November 2022, which was the strongest year-over-year rate among the regions. Capacity rose 58.0% and the load factor was up 2.9 percentage points to 82.6%.

European carriers’ November traffic climbed 14.8% versus November 2022. Capacity increased 15.2%, and load factor declined 0.3 percentage points to 83.3%.

Middle Eastern airlines saw an 18.6% traffic rise in November compared to November 2022. November capacity increased 19.0% versus the year-ago period, and load factor fell 0.2 percentage points to 77.4%.

North American carriers experienced a 14.3% traffic rise in November versus the 2022 period. Capacity increased 16.3%, and load factor fell 1.4 percentage points to 80.0%.

Latin American airlines’ November traffic rose 20.0% compared to the same month in 2022. November capacity climbed 17.7% and load factor increased 1.7 percentage points to 84.9%, the highest of any region.

African airlines had a 22.1% rise in November RPKs versus a year ago. November 2023 capacity was up 29.6% and load factor fell 4.3 percentage points to 69.7%, the lowest among regions.

Domestic Passenger Markets

Air passenger market in detail – November 2023

 November 2023

(% year-on-year)             World share1     RPK        ASK        PLF (%-pt)           PLF (level)

Domestic             41.9%    34.8%    32.5%    1.4%      82.4%

Dom. Australia  1.0%      13.2%    7.6%      4.3%      85.3%

Dom. Brazil         1.5%      2.3%      -0.1%     1.9%      82.7%

Dom. China P.R.                6.4%      272.0%  212.4%  12.4%    77.4%

Dom. India          2.0%      10.9%    12.9%    -1.5%     86.2%

Dom. Japan        1.2%      5.9%      0.4%      4.2%      80.0%

Dom. US              19.2%    8.9%      9.8%      -0.7%     83.7%

1% of industry RPKs in 2022   

Note: the six domestic passenger markets for which broken-down data are available account for approximately 31.3% of global total RPKs and 74.6% of total domestic RPKs

 Air passenger market in detail – November 2023

 November 2023

(% year-on-year)             World share1     RPK        ASK        PLF (%-pt)          

Total Market      100%     29.7%    28.6%    0.7%     

International      58.1%    26.4%    26.0%    0.3%     

Domestic             41.9%    34.8%    32.5%    1.4%     

November 2023

(% ch vs the same month in 2019)            World share1     RPK        ASK        PLF (%-pt)           PLF (level)

Total Market      100%     -0.9%     -1.8%     0.8%      81.8%

International      58.1%    -5.5%     -6.8%     1.1%      81.3%

Domestic             41.9%    6.7%      6.4%      0.2%      82.4%

1% of industry RPKs in 2022

The Bottom Line

“Aviation’s rapid recovery from COVID demonstrates just how important flying is to people and to businesses. In parallel to aviation’s recovery, governments recognized the urgency of transitioning from jet fuel to Sustainable Aviation Fuel (SAF) for aviation’s decarbonization. The Third Conference on Aviation Alternative Fuels (CAAF/3) in November saw governments agree that we should see 5% carbon savings by 2030 from SAF. This was followed up at COP28 in December where governments agreed that we need a broad transition from fossil fuels to avoid the worst effects of climate change.  Airlines don’t need convincing. They agreed to achieve net zero carbon emissions by 2050 and every drop of SAF ever made in that effort has been bought and used. There simply is not enough SAF being produced. So we look to 2024 to be the year when governments follow-up on their own declarations and finally deliver comprehensive policy measures to incentivize the rapid scaling-up of SAF production,” said Walsh.

 9 January 2024  No: 1

Geneva – The International Air Transport Association (IATA) released data for November 2023 global air cargo markets indicating the strongest year-on-year growth in roughly two years. This is partly due to weakness in November 2022, but also reflects a fourth consecutive month of strengthening demand for air cargo.

Global demand for air cargo, measured in cargo tonne-kilometres (CTKs), increased by 8.3% compared to November 2022. For international operations, demand growth was 8.1%.

Capacity, measured in available cargo tonne-kilometres (ACTKs), was up 13.7% compared to November 2022 (+11.6% for international operations). Most of the capacity growth continues to be attributable to the increase in belly capacity as international passenger markets continue their post-COVID recovery.

Compared to November 2019 (pre-COVID-19), demand is down 2.5% while capacity is up 4.1%.

Some indicators to note include:

•    Both the manufacturing output and new export order Purchasing Managers Indexes (PMIs) – two leading indicators of global air cargo demand—continued to hover just below the 50-mark in November with small positive movements indicating a deceleration of the economic slowdown.

•    Global cross-border trade recorded growth for the third consecutive month in October, reversing its previous downward trend.

•    Inflation in major advanced economies continued to soften in November as measured by the corresponding Consumer Price Index (CPI), centering around 3% year-on-year for the United States, Japan, as well as the EU, in November. In the meantime, China exhibited negative annual growth in its CPI for the second time in a row.

 •    Air cargo yields (including surcharges) continued their significant upward trend (+8.9% since October). Rising yields are in line with improving air cargo load factors over recent months. This could be tied in part to booming e-commerce deliveries from China to western markets.

“November air cargo demand was up 8.3% on 2022—the strongest year-on-year growth in almost two years. That is a doubling of October’s 3.8% increase and a fourth month of positive market development. It is shaping up to be an encouraging year-end for air cargo despite the significant economic concerns that were present throughout 2023 and continue on the horizon,” said Willie Walsh, IATA’s Director General.

Air cargo market in detail – November 2023

 November 2023

(% year-on-year)             World share1     CTK        ACTK     CLF (%-pt)2         CLF (level)3

Total Market      100.0%  8.3%      13.7%    -2.3%     46.7%

Africa    2.0%      3.9%      14.0%    -4.1%     42.1%

Asia Pacific          32.4%    13.8%    29.6%    -6.6%     47.9%

Europe 21.8%    6.7%      6.5%      0.1%      57.0%

Latin America     2.7%      4.2%      7.7%      -1.2%     36.3%

Middle East        13.0%    13.5%    15.4%    -0.8%     46.9%

North America  28.1%    1.8%      4.0%      -0.9%     40.8%

1% of industry CTKs in 2022   2year-on-year change in load factor   3Load Factor Level

November Regional Performance (total market)

Asia-Pacific airlines saw their air cargo volumes increase by 13.8% in November 2023 compared to the same month in 2022. This performance was significantly above the previous month’s growth of 7.6%. Available capacity for the region’s airlines increased by 29.6% compared to November 2022 as more belly capacity came online with the removal of COVID-19 restrictions.

North American carriers had the weakest demand growth in November with a 1.8% increase (YoY) in cargo volumes. This was, nonetheless, a significant improvement in performance compared to October’s -1.8% contraction. Capacity increased by 4.0% compared to November 2022.

European carriers saw their air cargo volumes increase by 6.7% in November compared to the same month in 2022. This was a stronger performance than in October (1.0%). Capacity increased 6.5% in November 2023 compared to 2022.

Middle Eastern carriers had the strongest performance in November 2023, with a 13.5% year-on-year increase in cargo volumes. This was similar to the significant improvement noted in the previous month’s performance (+13.0%). Capacity increased 15.4% compared to November 2022.

Latin American carriers experienced a 4.2% increase in cargo volumes compared to November 2022, very similar to the 4.0% year-on-year increase recorded for October. Capacity in November was up 7.7% compared to the same month in 2022.

African airlines saw their air cargo volumes increase by 3.9% in November 2023, slightly improved compared to October’s +2.9% growth performance. Capacity was 14.0% above November 2022 levels.

Author  Chris Rogers

Big PictureCOVID-19Supply ChainTrade

The outlook for global supply chains has faced a decade of disruptions. The most significant have included the US-China trade war, the COVID-19 pandemic-era consumer goods boom and the Russia-Ukraine war. Supply chain disruptions have also included a variety of natural disasters, financial failures and operational difficulties.

Supply chain activity has normalized in operational terms during 2023, but there are significant risks across the industrial policy, labor action and environmental policy implementation spheres influencing the supply chain industry outlook for 2024.

Supply chains need to be more resilient, but questions remain over whether corporations and their investors are willing to make the investments necessary to fortify them. There is no shortage of technology available to enable supply chain resilience, with generative AI as the latest example. But most companies need to see short-term returns on investment, and recent experiences with block chain, for instance, are leaving some hesitant.

•  Paying for resilience in a high-cost environment

Shrinking corporate profit margins and higher relative capital expenditures signal that reinvesting in capital stock may take priority for companies over spending on supply chains in 2024.

•  Technology toolkit for enabling resilience

Deploying technology to enable supply chain resilience requires close attention to return-on-investment. While some large enterprises have the resources to take gambles on emerging technologies, most players in the supply chain space will not spend for digital transformation without a near certainty of return on their investment in a reasonable period.

•  Delivering supply chain resilience through organizational agility

Building a robust supply chain is a long-term process, whether through adapting inventory policy and adopting new technologies or fundamentally retooling sourcing via supplier choice or international diversification.

•  Resilience still needed, spending not guaranteed

Supply chain resilience will be just as important in 2024 as it was in the past three years, yet corporate willingness and ability to invest in inventory management and multi sourcing may be limited by falling profits and high financing costs.