Author: Admin

May 15, 2023 by Payload Asia

For the first time in 13 years JAL will operate its own freighter.

Japan Airlines wants to further grow its cargo and mail business and has announced that it will introduce three Boeing 767-300ER freighters for dedicated cargo operations by the end of this year.

JAL has been securing revenues reliably and efficiently in the air cargo business by using cargo space on passenger flights and chartering other companies’ freighters in response to demand.

With the introduction of the freighter, the airline will operate under a new business model that will capture stable demand, improve aircraft utilization ratio and ensure profitability.

“To capture domestic and international e-commerce, parcel delivery, and other high growth cargo, we will build alliances with logistics partners and operate routes that ensure stable demand,” the airline said.

“We will ensure that domestic air transportation plays a growing role in response to the ‘2024 issue’ and limit business risks caused by fluctuations in demand and market conditions.

The ‘2024 issue’ refers to the foreseen shortage of truck drivers in Japan as new restrictions regarding overtime come into effect in Japan next year.

JAL said it will begin operating international flights mainly to East Asia from the end of this year. It will also operate domestic flights in the future to improve aircraft utilization and maximize cargo loading ratio, whilst flexibly offering charter and non-scheduled flights.

Other Topics: Air Cargo Network, Air Express, Air Freight Services, Air Logistics, Asia Pacific Air Cargo, Asia Pacific Air Freight, Asia Pacific Air Logistics, Asia Pacific Shipments, Cargo Flights, E-Commerce Logistics, Express Delivery, Express Logistics, International Air Shipments, International Express Delivery, Transpacific Air Cargo, Transpacific Air Freight

Geneva –  The International Air Transport Association (IATA) announced that the Focus Africa Conference will delve into six priorities under IATA’s Focus Africa initiative to strengthen aviation’s contribution to the continent’s economic and social development and improve connectivity, safety and reliability for passengers and shippers. Focus Africa is taking place in Addis Ababa, Ethiopia, on 20-21 June 2023, with Ethiopian Airlines as the host airline.

“Over the next 15 years, Africa’s passenger traffic is expected to double. The continent stands out as the region with the greatest potential and opportunity for aviation. But this potential is limited by infrastructure constraints, high costs, lack of connectivity, regulatory impediments, slow adoption of global standards and skills shortages, among other factors. The Focus Africa Conference will bring together the continent’s key stakeholders to address these challenges,” said Willie Walsh, IATA’s Director General.

Mesfin Tasew, Group CEO of Ethiopian Airlines, will deliver an Opening Keynote Address. “We are delighted to host IATA’s Focus Africa Conference and welcome the aviation industry to our home, Addis Ababa. Advancing the air transport industry is critical for Africa’s economic growth. The conference will allow industry leaders to join forces and drive the Focus Africa initiative,” said Tasew.

Speakers & Sessions

Walsh, Tasew, and Kamil Alawadhi, IATA’s Regional Vice-President for Africa and Middle East will be speaking at the event along with:

 •            Yvonne Makolo, CEO RwandAir and Chair of the IATA Board of Governors (2023-2024)

•             Adefunke Adeyemi, Secretary General, African Civil Aviation Commission (AFCAC)

•             Abdulrahman Berthe, Secretary General, African Airlines Association (AFRAA)

•             Aaron Munetsi, CEO, Airlines Association of Southern Africa (AASA)

•             Rodger Foster, CEO Airlink

•             Poppy Khoza, Director General Civil Aviation, South African Civil. Aviation Authority (SACAA)

•             Bradley Mims, Deputy Administrator, Federal Aviation Administration (FAA)

Session tracks will address:

 •            Safety

•             Aeronautical information management

•             Intra-African connectivity

•             Airport infrastructure

•             Biometrics and security

•             Modern airline retailing

•             Sustainability

•             Skilled workforce

RYTIS BERESNEVICIUS

2023-05-13

13 MINUTE READ

Ceri Breeze / Shutterstock.com

When looking at the Q1 2023 financial results posted by some of the largest airlines in the United States, one phrase comes to mind in terms of revenue: record-breaking. And yet, many of these carriers have been unable to post a profit during this period due to an industry-wide trend where costs have outweighed revenue, primarily caused by surging fuel prices.

While fuel prices have since come down and airlines are preparing for what is expected to be a great peak travel season, Q1 2023 results have been less positive than expected. 

AeroTime reviews the figures to find out how well the US airline industry has performed  – and which carrier is the biggest in terms of capacity.

Bordeaux Airport In Article Banner Wine

1. United Airlines’ rise to the top

While American Airlines can still boast that its fleet number is the biggest in the world, United Airlines has managed to offer slightly more capacity in Q1 2023. This made it the largest carrier in the US in terms of offered capacity in Q1 2023. 

United noted that its Available Seat Miles (ASM) was 65.7 billion, with the airline carrying 36.8 million passengers during the first three months of the year and earning a total revenue of $11.42 billion. However, revenues were outweighed by operating costs, which were $11.47 billion, resulting in an operating loss of $43 million and a net loss, following non-operating expenses of $213 million, of $194 million.

However, in the company’s financial release CEO Scott Kirby said that he was “extremely proud of the United team’s performance”, which contributed to “an all-time high operating cash flow” of $3.1 billion. Free Cash Flow (FCF) was $1.29 billion during Q1 2023, and, in total, United Airlines had $8 billion in cash at the end of Q1 2023.

KlasJet Roadshow Article Second May 2023

At the end of the period, that airline had a total of 677 commitments to purchase aircraft, including an order for 100 Boeing 787 and 737 MAX aircraft finalized in December 2022. Most of these aircraft are scheduled to be delivered after 2024, including 92 787s and 210 737 MAXs, with the airline expecting to receive 114 Boeing 737 MAX and 12 Airbus A321neo aircraft in 2023, and eight 787s, 88 737 MAXs, and 31 A321neos in 2024.

In Q1 2023, United Airlines operated 891 mainline and 446 regional aircraft, totaling 1,337 jets in its fleet.

However, Airbus told United Airlines that eight A321neo aircraft will be delivered instead in 2024, and a further 10 will be delivered in 2025 instead of 2024. 

Meanwhile, Boeing also notified the carrier about 737 MAX delivery delays. The manufacturer now expects to hand over 37 aircraft of the type to the carrier in 2024 rather than 2023 as was originally forecasted.

The airline estimates that a further 11 aircraft deliveries will be delayed by a year until 2024, and delivery of an additional 30 737 MAX aircraft will now take place in 2025 rather than 2024.

While revenues surged compared to Q1 2022, United Airlines still ended Q1 2023 with a net loss

United Airlines posts $194 million loss in Q1 2023 due to cost overruns

AIRLINES AVIATION ECONOMICS & FINANCE

BY

RYTIS BERESNEVICIUS

2023-04-19

2. American Airlines’ small profit

Out of the Big Four airlines in the United States – American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines – only a single company was profitable in Q1 2023.

American Airlines managed to eke out a small net profit of $10 million on the back of record-breaking revenues of $12.1 billion and FCF of $3 billion. Throughout the quarter, the airline, based at Dallas/Fort Worth International Airport (DFW), recorded 48.2 million passenger enplanements on a total of 1,464 aircraft in its mainline and regional fleet.

American Airlines operating costs were $11.7 billion, with the two largest expenses being fuel ($3.1 billion) and salaries, wages, and benefits ($3.281 billion). Another key issue for the airline is its debt, which peaked at $54 billion in Q2 2021. The company expects to reduce its liabilities to between $43 billion and $44 billion by the end of the year, improving its net debt to adjusted earnings before interest, tax, depreciation, amortization, and restructuring or rent (EBIDTAR) ratio from 6.7 at the end of 2022, to 4.5 in Q1 2023, and less than 4.5 by the end of 2023.

The 4.5 net debt/adjusted EBITDAR ratio is the lowest since 2019.

In total, capacity, measured in ASM was 65.0 billion, while Revenue Passenger Miles (RPM), measuring demand, was 52 billion with an average yield of 21.35 cents.

Comparatively, United Airlines RPM was 52.5 billion, with an average yield of 19.56 cents.

Robert Isom, the CEO of American Airlines, summarized that the airline “ran a great operation” and had delivered on its “financial guidance for the quarter, resulting in a first-quarter profit for the first time in four years”. 

Looking ahead, American Airlines expects ASM to grow by between 3.5% and 5.5% in Q2 2023, and between 5% and 8% in 2023. Adjusted earnings per diluted share are estimated to be between $1.20 and $1.40 in the next quarter and $2.50 and $3.50 for the full year.

In Q1 2023, the adjusted earnings per diluted share was $0.02.

American Airlines became the only big four airline in the US to achieve a profit in Q1 2023

Was American Airlines the only profitable US airline in Q1 2023?

AIRLINES AVIATION ECONOMICS & FINANCE

BY

RYTIS BERESNEVICIUS

2023-04-28

3. Delta Air Lines building momentum

Despite record-breaking revenue Delta Air Lines ended the first quarter of the year with a net loss. However, the airline’s expectations for the next few months remain positive.

Glen Hauenstein, the President of Delta Air Lines said: “We delivered record March quarter revenue with total unit revenue that was 16 percent higher than the same period in 2019.  These results reflect the strength in the underlying demand environment and continued momentum in premium products and loyalty revenue.” 

Operating revenues, based on an average passenger yield per flown mile of 20.95 cents, were $12.7 billion, with operating costs of $13 billion overshadowing a momentous quarter for the carrier. Included in the final lines of Delta Air Lines’ Q1 2023 financial report were an operating loss of $277 million and a net loss of $363 million.

Its ASM was 61.3 billion, with RPM standing at 49.6 billion at the end of the first quarter of 2023.

322 aircraft are scheduled to join the airline’s fleet in the coming years, most of which will be manufactured by Airbus because Delta Air Lines has outstanding orders for 59 A220-300s, 130 A321neos, 17 A330-900neos, and 16 A350-900s. Boeing is scheduled to deliver 100 737 MAX-10 aircraft to the airline. 

While the carrier has not provided an estimate of how many aircraft will be delivered in the next few years, it did indicate that its aircraft purchase commitments until 2027 and thereafter total $18.7 billion. As of March 31, 2023, Delta Air Lines said that it will spend $2.3 billion on new aircraft in the remaining nine months of 2023, growing to $4.4 billion in 2024 and $4.2 billion in 2025. In 2026 that sum will go down to $3.8 billion, and will drop to $2.5 billion in 2027, with the remaining $1.2 billion spent in the years following.

“With record advance bookings for the summer, we expect June quarter revenue to be 15 to 17 percent higher on capacity growth of 17 percent year over year,” Hauenstein added. 

While it remains optimistic about its future prospects, Delta Air Lines began the quarter with a net loss of $363 million

Delta Air Lines begins 2023 with $363 million net loss

AIRLINES AVIATION ECONOMICS & FINANCE

BY

RYTIS BERESNEVICIUS

2023-04-14

4. Southwest Airlines reeling from the operational meltdown in 2022

At the end of 2022, Southwest Airlines became the focus of much discussion when it experienced a complete operational meltdown during the Holiday period in December 2022. As a result, mor than 16,700 flights were canceled, with the negative effects carrying over to Q1 2023.

According to Southwest Airlines CEO Bob Jordan, that had been expected and the net loss was a result of the “negative financial impact of approximately $380 million pre-tax, or $294 million after-tax, related to the December 2022 operational disruption”. Jordan also added that the operational meltdown had a negative revenue impact of around $325 million due to “cancellations of holiday return travel and a deceleration in bookings for January and February 2023 travel”.

However, with the airline carrying 30.2 million passengers, offering 38 billion ASM, 29.5 billion RPM, and average yields per RPM of 17.28 cents, Jordan noted that “travel demand and revenue trends in March 2023 were strong and resulted in solid profitability for the month and record first quarter revenues”. 

The carrier ended Q1 2023 with operational revenues of $5.7 billion and operating costs of $5.9 billion, resulting in an operating loss of $284 million. Including other expenses, as well as benefits from income taxes, the airline’s net loss for the period was $159 million.

Southwest Airlines also highlighted that while it ended Q1 2023 with 793 aircraft, delivery delays at Boeing will result in the airline receiving 70 737 MAX-8 aircraft, 20 fewer than expected.

As a result, the airline noted that due to “the revision in aircraft deliveries and retirements” it now expects to “to end the year with 814 aircraft, compared with its previous guidance of 833 aircraft”.

Southwest Airlines is expecting to spend $2.3 billion on aircraft-related purchases in 2023

Southwest Airlines plans to spend $2.3 billion on new 737 MAX aircraft in 2023

AIRCRAFT AIRLINES AVIATION ECONOMICS & FINANCE

BY

RYTIS BERESNEVICIUS

2023-04-28

In mid-April 2023, Spirit AeroSystems notified Boeing about an irregular manufacturing procedure on certain 737 aircraft, except for the 737 MAX-9. The manufacturer later clarified that the related delivery delays would remove around 9,000 seats from airline schedules in the 2023 summer season, yet it reiterated its aim to deliver between 400 and 450 737 MAX aircraft in 2023.

While American Airlines only mentioned that it does not have any financial commitments in place for 10 737 MAX aircraft, United Airlines stated that the manufacturing defect could result in additional delays of six aircraft, with the possibility that the planemaker may inform customers of further delays down the line. Delta Air Lines’ 737 MAX-10 order should not be impacted, as the largest 737 MAX has still not been certified by the Federal Aviation Administration (FAA).

Boeing still expects to deliver between 400 and 450 737 MAX aircraft in Q1 2023

Boeing expects to deliver 400-450 B737 MAX in 2023 despite production problems

AIRCRAFT AVIATION ECONOMICS & FINANCE

BY

RYTIS BERESNEVICIUS

2023-04-26

5. JetBlue exploring new European horizons

JetBlue began the year by beating its own expectations, with the airline continuing to explore and announce new destinations in Europe, utilizing the increased range of the Airbus A321neoLR.

The airline earned $2.3 billion in revenue but with operating costs at $2.5 billion, and other expenses totaling $24 million, its net loss after income tax benefits was $192 million. Still, according to Robin Hayes, JetBlue’s CEO, the airline’s Q1 2023 results were better than expected and the airline is “forecasting strong sequential pre-tax margin improvement into the second quarter”.

“We remain well on track in executing our comprehensive plan to enhance our long-term profitability and restore our historical earnings power,” Hayes said, adding that in Q2 2023 the airline should see “strong revenue growth to continue as demand remains robust and as we see continued momentum from our commercial initiatives”. 

During the first quarter of the year, the carrier announced flights to Paris Charles De Gaulle Airport (CDG) and added flights to Amsterdam Schiphol Airport (AMS) in April 2023 from its two East Coast hubs, New York John F. Kennedy International Airport (JFK) and Boston Logan International Airport (BOS). Both flights are set to begin during the summer of 2023.

The average yield per passenger mile at JetBlue was 16.31 cents. Capacity, namely ASM and demand in the form of RPM, were 16.7 billion and 13.3 billion, respectively. The airline carried 10.1 million passengers, operating 290 aircraft by the end of Q1 2023. JetBlue was contracted to receive 11 Airbus A321neo and 17 A220 aircraft throughout the year. However, the carrier noted that Airbus delays had forced it to assume delivery of 11 A220, four A321neo, and four A321neoLR aircraft in 2023.

“We made no flight equipment deposits for the three months ended March 31, 2023, as we work with Airbus to realign such payments to anticipated delivery delays,” JetBlue noted. 

JetBlue provided an update on the timeline of its merger with Spirit Airlines

JetBlue anticipates merging with Spirit by H1 2024

AIRLINES AVIATION ECONOMICS & FINANCE

BY

RYTIS BERESNEVICIUS

2023-04-27

6. Alaska Airlines buying back its own stock

Alaska Airlines was another airline which, like many of its industry counterparts, registered revenue growth and had expected much from the future. However, it ended the first quarter of the year with a net loss. 

The Seattle Tacoma International Airport (SEA)-based carrier also managed to buy back its own shares during the quarter, spending $18 million on share repurchases. The carrier expects to spend as much as $100 million on common stock buybacks by the end of 2023. 

Alaska Airlines’ net loss was $142 million in Q1 2023. The company earned $2.1 billion in revenue but spent $2.3 billion on running its operations throughout the three months. While most of the expenses were non-fuel related, these items have only grown by 13% compared to Q1 2022. 

Furthermore, the company had $537 million in cash at the end of the quarter compared, for example, to JetBlue’s $1.4 billion. This is despite Alaska Airlines having similar operational statistics, including 15.7 billion ASM and 12.5 billion RPM. Per mile yields were 15.80 cents for the 9.8 million passengers it carried during the period.

Its fleet at the end of the quarter included a mix of Boeing 737 aircraft, including the NextGeneration (NG), MAX and freighters as well as Embraer E175s, and totaled 294 aircraft. The carrier plans to add 40 additional aircraft throughout the year, including one 737-800F, three 737 MAX-8, 28 737 MAX-9, and eight E175s. The airline also noted that the expected delivery estimates already include the delivery delays communicated by Boeing, yet these are unrelated to the production problem that does not affect the 737 MAX-9.

Two Boeing 737-800 NG and 10 Airbus A321neo, the latter of which are the final remnants of a merger with of the merger with Virgin America, will leave Alaska Airlines’ fleet in 2023.

Despite a net loss of $142 million, Alaska Airlines still repurchased $18 million of its own stock

Alaska Airlines buys back stock worth $18 million despite Q1 2023 loss

AIRLINES AVIATION ECONOMICS & FINANCE

BY

RYTIS BERESNEVICIUS

2023-04-21

7. Spirit Airlines updates on merger with JetBlue

Although many airlines are optimistic about their future, Spirit Airlines is more reserved about the next few months. The airline stated that while it should achieve a positive profit margin, it will be in the single digits due to issues related to the Pratt & Whitney PW11000G engine powering the A320neo family of aircraft. 

The issue, which has affected airlines across the globe, including the recent suspension of operations by India’s Go First, has continued to hamper Spirit Airlines. 

According to the carrier’s Chief Financial Officer (CFO) Scott Haralson, in Q2 2023 the operating margin should be between 4.5% to 6.5%, but “in this demand environment, and with a declining fuel price in the second quarter of this year, the business at full utilization should be producing double digit operating margins”. The CFO pointed out that pilot attrition is also negatively affecting the airline’s operations, resulting in less than desirable aircraft utilization. Haralson added that the A320neo aircraft engine problems “will likely remain a drag on utilization for the rest of the year”.

Ending the quarter with a net loss of $103.9 million, Spirit Airlines earned $1.3 billion in revenue and spent $1.46 billion on operating expenses. Its ASM was 13.2 billion, while RPM was 10.6 billion with an average yield of 12.64 cents. On average the airline operated 194.8 aircraft daily. By the end of the quarter, it had 195 aircraft.

In terms of its merger with JetBlue, the low-cost carrier stated that it expects to complete the process by H1 2024, even though the US Department of Justice (DOJ) filed a suit to block the merger between the two airlines in March 2023. At the time Merrick Garland, the US Attorney General argued that the two airlines coming together would “result in higher fares and fewer choices for tens of millions of travelers, with the greatest impact felt by those who rely on what are known as ultra-low-cost carriers in order to fly.” 

Spirit Airlines said that its expected double-digit operating margin is being hampered by A320neo engine issues

Spirit Airlines’ hopes of double-digit margins dashed by A320neo engine issues

AIRLINES AVIATION ECONOMICS & FINANCE

BY

RYTIS BERESNEVICIUS

2023-04-27

8. Frontier Airlines beginning to reshape its network following Spirit merger failure

Frontier Airlines almost made a profit during the quarter, with the low-cost carrier beginning to reshape its network in the face of changing market dynamics and after it was outbid when trying to acquire Spirit Airlines.

The airline posted a narrow $13 million net loss during the first three months of the year, earning revenues of $848 million that were less than the $873 million operating expenses in Q1 2023, which were offset by $4 million in tax benefits. Frontier noted in its Q1 2023 results release that one of those costs was a $1 million charge “related to the terminated merger with Spirit Airlines, Inc. within transaction and merger-related costs”. 

“Post-pandemic demand has increased due, in part, to work from home arrangements and flexible working schedules. We also see a change in passenger behavior with outsized demand on peak days and peak periods,” stated Barry Biffle, the President and CEO of Frontier Airlines. 

Following an analysis of consumers’ new behavior, Frontier Airlines has begun to reshape its network in Q2 2023 to, Biffle added, “exploit this post-pandemic demand dynamic, and expect the changes to be fully deployed in the second half of 2023”. 

And while capacity will be a reduced going forward, Biffle noted that its cost advantage “will widen further throughout the year, allowing Frontier to remain the lowest unit cost operator in the industry in spite of lower utilization on off-peak days and in off-peak periods”. The executive added that this will result in a pre-tax margin of between 7% and 10%, which would be the airline’s highest result post-pandemic.

With a fleet totaling 125 aircraft, Frontier Airlines had 8.7 billion ASM, 7.2 billion RPM, and carried 6.8 million passengers with an average of 121 operated aircraft in Q1 2023.

9. Hawaiian Airlines rising fuel bill blamed on A321neo

Like Spirit Airlines, Hawaiian Airlines is experiencing issues with its Airbus A321neo fleet, with the airline arguing that the A330s that replaced the grounded A321neo resulted in a much higher fuel bill.

The airline declared that its fuel consumption rose by 21.4% compared to Q1 2022 due to “higher capacity and inefficiencies resulting from these challenges”. 

Capacity, measured in ASM, was 4.9 billion in Q1 2023, compared to 4.2 billion in Q1 2022. Meanwhile, demand was 3.8 billion RPM compared to 2.9 billion RPM in Q1 2022. The average yield was 14.27 cents, with Hawaiian Airlines operating 63 aircraft throughout the three-month period: 24 Airbus A330-200, 18 A321neo, 19 Boeing 717, and one each of ATR 42 and ATR 72 aircraft. While the carrier did not indicate how many A321neos were grounded, ch-aviation.com data shows that three out of the 18 aircraft of the type are currently under maintenance.

“Certain of our suppliers, including our supplier of engines for our A321neo aircraft, Pratt & Whitney, have experienced and continue to experience significant supply chain disruptions,” the airline noted in its Q1 2023 US Securities and Exchange Commission (SEC) filing. 

While Hawaiian Airlines does not yet know the full extent of the impact on its operations, it anticipates “continued delays for Pratt & Whitney engines on our A321neo aircraft during 2023”.

The airline’s net loss for Q1 2023 was $98.2 million. The airline earned $621 million in revenue, while operating expenses were $730 million.

Hawaiian Airlines blames A321neo engine supply issues for its growing fuel bill

Hawaiian Airlines blames A321neo engine supply issues for rising fuel bill

AIRLINES AVIATION ECONOMICS & FINANCE

BY

RYTIS BERESNEVICIUS

2023-04-27

10. Allegiant Airlines ending the quarter profitably and beginning to switch to Boeing

The only other profitable airline, besides American Airlines, is Allegiant Airlines, with the small carrier posting a net profit for Q1 2023.

Allegiant Airlines ended Q1 2023 with a net profit of $56.1 million, with operating revenues of $649.6 million outweighing operating expenses that totaled $554.8 million in addition to other costs that set the company back $20.4 million.

“The team worked tirelessly to ensure operational integrity, and our controllable completion of 99.9 percent for the quarter is a testament to their efforts. Running a safe, reliable operation is a critical component to our success, and I could not be prouder of the team’s performance,” commented John Redmond, the CEO of Allegiant Travel Company, the parent company of Allegiant Airlines.

Capacity was 4.5 billion ASM (4.6 billion including non-scheduled services), while demand was 3.9 billion RPM, as the airline carried 4.1 million scheduled passengers throughout Q1 2023 with an average yield of 8.29 cents. The all-Airbus operator operated 124 aircraft by the end of the quarter, namely the A319ceo and A320ceo.

However, by Q4 2023 it expects to receive its first two Boeing 737 MAX aircraft. Allegiant Airlines ordered the rival product to the A320 family in December 2021, finalizing the order in January 2022. The airline’s then-CEO and current Chairman of the Board Maurice J. Gallagher, Jr. had argued that deliveries of new aircraft, which is a contrast to its all-second hand A320 family fleet, will bring numerous benefits, including “flexibility for capacity growth and aircraft retirements, significant environmental benefits, and modern configuration and cabin features our customers will appreciate.”

Confirmed: Allegiant Air orders up to 100 Boeing 737 MAXs

AIRCRAFT

BY

VYTE KLISAUSKAITE

2022-01-05

In summary, these are the top 10 airlines in the United States in terms of capacity, measured in ASM:

United Airlines (65.7 billion)

American Airlines (65 billion)

Delta Air Lines (61.3 billion)

Southwest Airlines (38 billion)

JetBlue (16.7 billion)

Alaska Airlines (15.7 billion)

Spirit Airlines (13.2 billion) 

Frontier Airlines (8.7 billion)

Hawaiian Airlines (4.7 billion) 

Allegiant Airlines (4.5 billion)

Revealed: The top 10 most loved and hated airlines in the world

CIVIL AVIATION

BY

JEAN CARMELA LIM

2023-02-28

American Airlines

Delta Air Lines

United Airlines

United States

Geneva – The International Air Transport Association (IATA) announced strong demand growth in air travel for March 2023.

 •            Total traffic in March 2023 (measured in revenue passenger kilometers or RPKs) rose 52.4% compared to March 2022. Globally, traffic is now at 88.0% of March 2019 levels.

 •            Domestic traffic for March rose 34.1% compared to the year-ago period. Total March 2023 domestic traffic was at 98.9% of the March 2019 level.

 •            International traffic climbed 68.9% versus March 2022 with all markets recording healthy growth, led once again by carriers in the Asia-Pacific region. International RPKs reached 81.6% of March 2019 levels while the load factor at 81.3% exceeded the March 2019 level by 10.1 percentage points.

“The calendar year first quarter ended on a strong note for air travel demand. Domestic markets have been near their pre-pandemic levels for months. And for international travel two key waypoints were topped. First, demand increased by 3.5 percentage points compared to the previous month’s growth, to reach 81.6% of pre-COVID levels. This was led by a near-tripling of demand for Asia-Pacific carriers as China’s re-opening took hold. And efficiency is improving as international load factors reached 81.3%. Even more importantly, ticket sales for both domestic and international travel give every indication that strong growth will continue into the peak Northern Hemisphere summer travel season,” said Willie Walsh, IATA’s Director General.

March 2023 (% year-on-year)     World share1     RPK        ASK        PLF (%-pt)2         PLF (level)3

Total Market      100.0%  52.4%    41.2%    5.9%      80.7%

Africa    2.1%      66.1%    51.0%    6.7%      73.9%

Asia Pacific          22.1%    158.9%  109.0%  15.3%    79.2%

Europe 30.7%    37.0%    25.9%    6.5%      80.5%

Latin America     6.4%      19.9%    19.8%    0.1%      81.2%

Middle East        9.8%      40.4%    28.3%    6.9%      79.4%

North America  28.9%    16.9%    15.9%    0.7%      83.7%

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

 International Passenger Markets

•             Asia-Pacific airlines had a 283.1% increase in March 2023 traffic compared to March 2022, continuing the robust momentum since the lifting of travel restrictions in the region. Capacity rose 161.5% and the load factor increased 26.8 percentage points to 84.5%, the second highest among the regions.

 •            European carriers posted a 38.5% traffic rise versus March 2022. Capacity climbed 27.0%, and load factor rose 6.6 percentage points to 79.4%, which was the second lowest among the regions.

 •            Middle Eastern airlines saw a 43.1% traffic increase compared to March a year ago. Capacity climbed 30.5% and load factor pushed up 7.0 percentage points to 79.4%.

 •            North American carriers’ traffic climbed 51.6% in March 2023 versus the 2022 period. Capacity increased 34.0%, and load factor rose 9.8 percentage points to 84.8%, the highest among the regions.

 •            Latin American airlines had a 36.5% traffic increase compared to the same month in 2022. March capacity climbed 33.4% and load factor rose 1.9 percentage points to 82.8%.

 •            African airlines’ traffic rose 71.7% in March 2023 versus a year ago, the second highest among the regions. March capacity was up 56.2% and load factor climbed 6.5 percentage points to 72.2%, lowest among the regions.

Domestic Passenger Markets

March 2023 (% year-on-year)     World share1  

RPK        ASK        PLF (%-pt)2         PLF (Level)3

Domestic             42.1%    34.1%    32.8%    0.8%      79.8%

Australia              1.0%      44.7%    25.9%    10.7%    82.5%

Brazil     1.5%      8.0%      8.7%      -0.6%     78.6%

China P.R.            6.4%      195.2%  153.0%  10.3%    72.3%

India      2.0%      20.3%    15.4%    3.5%      85.6%

Japan    1.2%      61.1%    14.2%    23.0%    79.0%

US          19.3%    4.4%      8.4%      -3.2%     82.9%

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

•             Brazil’s domestic traffic rose 8.0% in March compared to a year ago and is now just fractionally below pre-pandemic levels.

 •            Indian airlines’ domestic demand climbed 20.3% in March and was 10.0% above the March 2019 levels.

March 2023 (% year-on-year vs 2019)     World share1     RPK        ASK        PLF (%-pt)2         PLF (level)3

Total Market      100.0%  -12.0%  -10.5%  -1.4%     80.7%

International      57.9%    -18.4%  -18.8%  0.4%      81.3%

Domestic             42.1%    -1.1%     4.1%      -4.3%     79.8%

The Bottom Line

“As traveler expectations build towards the peak Northern Hemisphere summer travel season, airlines are doing their best to meet the desire and need to fly. Unfortunately, a lack of capacity means that some of those travelers may be disappointed. Part of this capacity shortfall is attributable to the widely reported labor shortages impacting many parts of the aviation value chain, as well as supply chain issues affecting the aircraft manufacturing sector that is resulting in aircraft delivery delays. However, a significant share of recent flight cancellations, primarily in Europe, are owing to job actions by air traffic controllers and others. These irresponsible actions resulted in thousands of unnecessary cancellations in March. This is unacceptable and should not be tolerated by the authorities,” said Walsh.

Geneva – The International Air Transport Association (IATA) released data for March 2023 global air cargo markets showing a continued decline against previous year’s demand performance. This trend began in March 2022.

•             Global demand, measured in cargo tonne-kilometers (CTKs*), fell 7.7% compared to March 2022 (-8.1% for international operations). This was a slight improvement over the previous February’s performance (-9.4%) and half the rate of annual decline seen in January and December (-16.8% and -15.6% respectively). At this point, it is unclear if this is a potentially modest start of an improvement trend or the upside of market volatility. Irrespective of this, March performance slipped back into negative territory compared to pre-COVID levels (-8.1%).

 •            Capacity (measured in available cargo tonne-kilometers, ACTK) was up 9.9% compared to March 2022. The strong uptick in ACTKs reflects the addition of belly capacity as the passenger side of the business continues to recover.

 •            Several factors in the operating environment should be noted:

o             Even with record low unemployment rates, the global economy continues to decelerate due to a combination of factors such as tightening global financial conditions, high levels of global debt, and supply chain problems including those linked to the war in Ukraine.

o             In line with the weakening global trade, the Purchasing Manager Indices (PMIs) for new export orders at the global level remained below the 50-critical line for a full year as of March. China’s PMI retreated to below the 50-mark in March, following a slight improvement observed in February.

 o            The PMI for supplier delivery times indicates high inventory levels, which tends to have a negative impact on air cargo.

 o            Global goods trade decreased by 2.6% in February; this was a faster rate of decline than the previous month of -1.0%.

“Air cargo had a volatile first quarter. In March, overall demand slipped back below pre-COVID-19 levels and most of the indicators for the fundamental drivers of air cargo demand are weak or weakening. While the trading environment is tough, there is some good news. Airlines are getting help in managing through the volatility with yields that have remained high and fuel prices that have moderated from exceptionally high levels. Looking ahead, with inflation reducing in G7 countries policy makers are expected to ease economic cooling measures and that would stimulate demand,” said Willie Walsh, IATA’s Director General.

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

Total Market      100.0%  -7.7%     9.9%      -8.8%     46.2%

Africa    2.0%      -6.2%     -4.1%     -1.1%     48.9%

Asia Pacific          32.4%    -7.3%     23.6%    -16.2%  48.5%

Europe 21.8%    -7.8%     8.8%      -10.3%  57.0%

Latin America     2.7%      -5.3%     12.9%    -7.0%     36.6%

Middle East        13.0%    -5.5%     9.7%      -7.3%     45.6%

North America  28.1%    -9.4%     0.4%      -4.2%     39.3%

1 % of industry CTKs in 2022  2 Change in load factor  3 Load factor level

March Regional Performance

•             Asia-Pacific airlines saw their air cargo volumes decrease by 7.3% in March 2023 compared to the same month in 2022. This was a slight decrease in performance compared to February (-5.4%).  The drop in demand suggests that air cargo traffic in the region has not yet stabilized following China’s reopening in January. Available capacity in the region increased by 23.6% compared to March 2022 as more belly capacity came online from the passenger side of the business.

•             North American carriers posted the weakest performance of all regions with a 9.4% decrease in cargo volumes in March 2023 compared to the same month in 2022. This was a decrease in performance compared to February (-10.3%).  The transatlantic route between North America and Europe saw traffic declining at an accelerated pace throughout March. Capacity increased 0.4% compared to March 2022.

•             European carriers saw the most substantial improvement in demand in March over the previous month.  Airlines in the region saw their air cargo volumes decrease by 7.8% in March 2023 compared to the same month in 2022. This was an improvement in performance versus February (-15.9%). Airlines in the region continue to be most affected by the war in Ukraine. Capacity increased 8.8% in March 2023 compared to March 2022.

•             Middle Eastern carriers experienced a 5.5% year-on-year decrease in cargo volumes in March 2023. This was also an improvement to the previous month’s decline (-7.1%). The demand on Middle East-Europe routes has been trending upward in recent months. Capacity increased 9.7% compared to March 2022.

•             Latin American carriers had the strongest performance of all regions in March despite posting a decline in performance over the previous month. Carriers in the region reported a 5.3% decrease in cargo volumes in March 2023 compared to March 2022. This was a drop in performance compared to February which saw a 2.9% decrease. Capacity in March was up 12.9% compared to the same month in 2022. 

•             African airlines saw cargo volumes decrease by 6.2% in March 2023 compared to March 2022. This was an improvement in performance compared to the previous month (-7.4%). Notably, Africa to Asia routes experienced significant cargo demand growth in March. Capacity was 4.1% below March 2022 levels.

Geneva – The International Air Transport Association (IATA) welcomed the agreement by AT&T Services, T-Mobile, UScellular, and Verizon to extend until 1 January 2028 the voluntary mitigation measures for 5G C-band transmissions at 188 US airports. These mitigation measures, which were put in place in January 2022, concurrent with the rollout of 5G C-band operations at or near US airports, include lowering the power of 5G transmissions and had been set to expire 1 July 2023. However, while the agreement is a welcome stop-gap development, it is by no means a solution. The underlying safety and economic issues around 5G C-band deployments by telecommunications services providers (telcos) have only been kicked down the road.

“Airlines did not create this situation. They are victims of poor government planning and coordination. Industry concerns about 5G, expressed for many years in the appropriate forums, were ignored and over-ridden. Half-measure solutions have been foisted upon airlines to implement at their own expense and with little visibility into their long-term viability. This extension is an opportunity for all stakeholders, including telcos, government regulators, airlines and equipment manufacturers, to work together for a fair and equitable solution,” said Nick Careen, IATA’s Senior Vice President Operations, Safety and Security.

Background to the current situation

The activation of 5G C-band operations in January 2022 threatened enormous disruption to the US air transport system because of the potential risk of interference with aircraft radio altimeters (radalts) that also use C-band spectrum and are critical to aircraft landing and safety systems. This was only addressed at the eleventh hour when AT&T and Verizon agreed to a voluntary power limit for 5G C-band transmissions near airports. Even with this agreement, however, the continuing risk of interference with aircraft radalts was seen as so significant by the Federal Aviation Administration (FAA) that airlines were only permitted to operate at affected airports in low visibility (Category 2 and Category 3) conditions through one of two methods: 

 •            Alternative Means of Compliance (AMOC) under which avionics and aircraft original equipment manufacturers (OEMs) establish that specific aircraft / radalt combinations provide sufficient resilience against interference to continue to utilize low visibility landing procedures at the affected airports. 

 •            Modifying existing radalts or replacing them with newer models at their own expense, to enable unrestricted operations at agreed 5G power levels.

In May 2022, the FAA informed airlines that, as of 1 July 2023 the AMOC process would end. In its place, a blanket requirement defining a minimum performance level for radalts for low visibility landing procedures was to be established. Radalts not meeting the minimum performance level would have to be replaced or upgraded at airline expense. The cost of fleet wide radalt upgrading is estimated at more than $638 million.

Several airlines began the radalt upgrade process shortly after the May 2022 communication from the FAA, even though the FAA did not issue a formal notice of proposed rulemaking until January 2023. Even then, supply chain issues make it unlikely that all aircraft can be upgraded by the 1 July deadline, threatening operational disruptions during the peak northern summer travel season.

Recent developments

The latest agreement by the telcos to defer until January 2028 full power-up of 5G C-band transmissions near airports buys time but does not address underlying issues.

The retrofits required by 1 July 2023 are a temporary fix as they are not sufficiently resilient in the face of full power 5G C-band transmissions. New 5G tolerant radalt standards are being developed but are not expected to be approved before the second half of 2024. Following that, radalt makers will begin the lengthy process to design, certify and build the new devices for installation in thousands of existing aircraft, as well as for all new aircraft delivered between now and 2028. Four-and-a-half years is a very tight timeframe for the scale of this undertaking.

“Many airlines have indicated that despite their best efforts they will not meet the 1 July deadline owing to supply chain issues. But even for those that do, these investments will bring no gains in operating efficiency. Furthermore, this is only a temporary holding action. Under current scenarios, airlines will have to retrofit most of their  aircraft twice in just five years. And with the standards for the second retrofit yet to be developed we could easily be facing the same supply chain issues in 2028 that we are struggling with today. This is patently unfair and wasteful. We need a more rational approach that does not place the entire burden for addressing this unfortunate situation on aviation,” said Careen.

Logistics companies City Zone Express Malaysia and AMAZING Logistics and Supply Chain based in Thailand were awarded in Jakarta during the closing ceremony of the ARISE Plus Project.

The two outstanding companies received the Gold Partner awards for their involvement in the ASEAN Customs Transit System (ACTS) and were recognised for the high number of ACTS movements conducted in 2022.

ACTS was launched on 30 November 2020 as an online customs system that enables the private sector in ASEAN to benefit fully from the ASEAN Economic Community (AEC) and the free movement of goods across the region. ACTS was developed with the financial support of the European Union under the ARISE Plus programme

Satvinder Singh, Deputy Secretary General for AEC, said: “ARISE Plus has been instrumental in the implementation of the ASEAN Customs Transit System (ACTS), which has reduced costs, increased the speed of border clearance, and facilitated trade between ASEAN Member States,” H.E. Singh said in his opening remarks.

“The private sector has benefited significantly, with a 30 to 40 percent reduction in costs when using the ACTS compared to other transit modes available in the region,” he added.

“I would describe ACTS benefits as seamless clearance, faster transit, precise timing and cost reduction,” Mr S. Pirithivaraj Selvarajoo, Director of City Zone Express Malaysia said. “My motto for ACTS is perfect logistics and digital connectivity for present-day supply chain needs.”

“I discovered under ACTS we can shorten the transit time from Bangkok to Singapore,” Mr Witoon Santibunyarat, Group Managing Director of AMAZING Logistics and Supply Chain Thailand said. “It takes only two and a half days. This has never happened before!”

Established on 8 November 2012, the ARISE and its successor ARISE Plus have been the EU’s flagship programme in supporting ASEAN’s economic integration. For over 10 years, the project focused its support on four components: trade facilitation and regulatory transparency, standards and conformance, customs, transport and transit, monitoring and statistics.

“The success of the ACTS highlights the importance of continued collaboration between ASEAN, ASEAN Member States, ASEAN private sectors and international partners,” Igor Driesmans, Ambassador of the European Union to ASEAN, added. “As ASEAN’s strategic partner, the EU is committed to continue our support for ASEAN’s integration across all three pillars of the ASEAN Community”.

Other Topics: Air Cargo Network, Air Express, Air Freight Services, Air Logistics, Asia Pacific Air Cargo, Asia Pacific Air Freight, Asia Pacific Air Logistics, Asia Pacific Shipments, Cargo Flights, E-Commerce Logistics, Express Delivery, Express Logistics, International Air Shipments, International Express Delivery, Transpacific Air Cargo, Transpacific Air Freight

Istanbul – The International Air Transport Association (IATA) highlighted three priorities to enable the air cargo industry to maintain momentum against the backdrop of a challenging operating environment. The priorities, outlined at the 16th World Cargo Symposium (WCS), which opened in Istanbul today are:

•    Sustainability

•    Digitalization

•    Safety

“Air cargo is a different industry than the one that entered the pandemic. Revenues are greater than they were pre-pandemic. Yields are higher. The world learned how critical supply chains are. And the contribution of air cargo to the bottom line of airlines is more evident than ever. Yet, we are still linked to the business cycle and global events. So, the war in Ukraine, uncertainty over where critical economic factors like interest rates, exchange rates and jobs growth are concerns that are real to the industry today. As we navigate the current situation, air cargo’s priorities have not changed, we need to continue to focus on sustainability, digitalization, and safety,” said Brendan Sullivan, IATA’s Global Head of Cargo. 

Sustainability

Sustainability is a critical priority and the aviation industry’s license to do business. Last October, at the 41st ICAO Assembly, governments agreed to the Long-Term Aspirational Goal (LTAG) of net zero carbon emissions by 2050, in line with the industry’s commitment adopted in 2021.

Sustainable Aviation Fuel (SAF) is critical to achieving this goal, 65% of carbon abatement will come from SAF, however, production levels remain challenging. IATA called for government incentives for production.

“SAF is being produced. And every single drop is being used. The problem is that the quantities are small. The solution is government policy incentives. Through incentivizing production, we could see 30 billion liters of SAF available by 2030. That will still be far from where we need to be. But it would be a clear tipping point towards our net zero ambition of ample SAF quantities at affordable prices,” said Sullivan.

IATA outlined three other areas where it was working to support the energy transition of the industry:

 •            Supporting effective carbon calculations and offsetting through the development of accurate and standardized emissions calculation methodology and the launch of CO2 Connect for Cargo later this year – a precise tool for calculating emissions from operations.

•             Expanding the IATA Environmental Assessment (IEnvA) to airports, cargo handling facilities, freight forwarders, and ramp handlers to allow the industry to drive commercial success, build trust in our sustainability actions, and positively impact the industry.

•             Developing environmental, social and governance (ESG) related metrics to cut through the many methodologies in circulation with ESG Metrics Guidance for Airlines.

Digitalization

Air cargo needs to continuously improve its efficiency. The area with greatest potential is digitalization. IATA outlined three goals:

•             100% airline capability of ONE Record by January 2026. This initiative will replace the many data standards used for transport documents with a single record for every shipment. The Cargo Services Conference agreed on Sunday that it wants to achieve 100% airline capability by 1 January 2026 and the Cargo Advisory Council supports this vision.

•             Ensuring digital standards are in place to support the global supply chain. Guidance has been finalized on tracking devices – the IATA Interactive Cargo guidelines – used to monitor the quality and accuracy of conditions of time and temperature sensitive goods being shipped across the world.

•             Ensuring compliance and support for customs, trade facilitation and other government processes that are increasingly digitalized. Digitalization plays an important role in evolving strategies for trade facilitation, reducing operational barriers at borders and managing the flows of goods securely.

Safety

“Alongside sustainability and efficiency is safety. The agenda for air cargo continues to be dominated by lithium batteries. A lot has been done. But, quite honestly, it is still not enough,” said Sullivan.

IATA outlined three safety priorities for air cargo:

 •            Stopping rogue shippers, Civil aviation authorities must take strong action against shippers not declaring lithium batteries in cargo or mail shipments.

•             Accelerating the development of a test standard for fire-resistant aircraft containers with a fire involving lithium batteries.

•             Ensuring recognition from governments of the single standard to identify all lithium battery powered vehicles which comes into effect from 1 January 2025.

Value of Air Cargo

“Air cargo is a critically important industry. It helps build a better future for the people of the world. it’s an industry that saves lives, delivering aid and relief to those in need. The industry mobilized to support those affected by the earthquakes in Syria and Türkiye. Working together to ensure that air cargo remains a reliable and efficient means of providing support to those in need, while simultaneously strengthening our global supply chains and contributing to the sustainable development of our economies is essential,” concluded Sullivan.

The Hague – The International Air Transport Association (IATA) reacted positively to the decision by the Dutch court to uphold the legal challenges lodged by IATA, KLM and other airlines against the Dutch government’s ‘experimental regulation’ to cut Schiphol airport’s flight limit to 460,000 from November 2023.

IATA Director General Willie Walsh said: “We welcome the judge’s decision. This case has been about upholding the law and international obligations. The judge has understood that the Dutch government violated its obligations in shortcutting processes that would bring scrutiny to its desire to cut flight numbers at Schiphol. This decision gives vital stability for this year to the airlines using Schiphol airport and maintains the choice and connectivity passengers value.

Winning this vital reprieve is good news for Schiphol’s passengers, Dutch businesses, the Dutch economy and airlines. But the job is not done. The threat of flight cuts at Schiphol remains very real and is still the stated policy of the government. Schiphol airport themselves yesterday announced night flight cuts without consultation. Airlines understand the importance of resolving issues such as noise. The Balanced Approach is the correct EU and global legally-enshrined process for managing noise impacts. It has helped airports around the world successfully address this issue.”

Q&A

What was the legal challenge about?

The Dutch government has recently decided to reduce the number of flight movements at Schiphol from 500,000 to 440,000 per year. We believed no legal basis existed for this reduction: it violates international treaties and European regulations. Governments can lower the number of flight movements in order to reduce noise, but only after having after a careful process, consisting of e.g. assessing the current noise level, setting a noise goal and considering alternative measures. This did not occur. The 440,000 cap is not a means to an end, but the objective. The Dutch government also sought to accelerate the implementation of this reduction by introducing an experimental regulation with an interim cap of 460,000 flight movements from 1 November 2023. We believed this interim cap is also subject to – and therefore in violation of – international treaties and European regulations.

IATA and airlines that fly into Schiphol sought to halt the application of this experimental regulation. KLM and other carriers based at Schiphol have launched a similar legal action. The carriers that joined IATA’s action were: Air Canada, United Airlines, FedEx, JetBlue, British Airways, Vueling, Lufthansa, and Airlines for America.

What was the judge’s decision?

The judge ruled that the State had not followed the correct procedure in introducing the proposed temporary regulation. According to European rules, the State can only reduce the number of aircraft movements at an airport after going through a careful process. This process entails, among other things: the State must identify various measures that can reduce noise pollution, the State must consult all interested parties, and a reduction in the number of aircraft movements is only allowed if it is clear that other measures to limit noise pollution are insufficient. The Interim Injunction Judge noted that the State had started that procedure for the proposed reduction of the number of aircraft movements to 440,000 per year starting in the 2024/2025 season. But the State did not follow this procedure for the proposed temporary regulation in which the State wants to reduce the maximum number of allowed aircraft movements to 460,000 for the upcoming 2023/2024 season. Therefore the ruling states that the Dutch State may not reduce the number of aircraft movements at Schiphol from 500,000 to 460,000 for the season 2023/2024.

 Why had the Dutch government ordered a cut in flight numbers?

The Minister for Water and Infrastructure in the coalition Dutch government is responding to the concerns of some residents who are principally concerned about noise. Local air quality and some greenhouse gas emissions (nitrogen and CO2) have also been listed as ‘concerns’ but are not the reason for the cut. A letter (24.6.22) from Minister Marc Harbers to the President of the House of Representatives in the Hague states that the noise nuisance is the objective, but the Minister also admits that he has not yet investigated noise nuisance or set a specific nuisance objective, which are both requirements before being allowed to apply such restrictions:

On what basis were IATA and other plaintiffs seeking to have the ‘experimental regulation’ ruled unlawful?

IATA and the co-plaintiffs believe that the Dutch government must follow the Balanced Approach (BA), a process and methodology for mitigating noise at airports. The BA, which is enshrined in ICAO Annex 16 (part of the Chicago Convention, to which the Netherlands is party), international treaties and also in European Regulation 598/2014, explicitly states that flight reductions should be a last resort, only used when other possible measures have been exhausted. These measures include an objective determination of the noise situation and the noise objective; an inventory of possible measures; an estimation of the cost-effectiveness of those measures; operating restrictions as a last resort; and the principles of proportionality and non-discrimination. In IATA’s view, the government has not followed this process.

Why does this matter so much to airlines?

There are multiple reasons, including:

•             The need for clarity of the application of the BA in international and European law. Airlines wish to have legal certainty and a government should be compliant with its legal obligations. •             The most pressing priority is to have certainty for the Winter Season schedules, which are

Geneva – The International Air Transport Association (IATA) released data for February 2023 global air cargo markets showing that air cargo demand rose above pre-pandemic levels.

•             Global demand, measured in cargo tonne-kilometers (CTKs*), fell 7.5% compared to February 2022 (-8.3% for international operations). This was half the rate of annual decline seen in the previous two months (-14.9% and -15.3% respectively). February demand for air cargo was 2.9% higher than pre-pandemic levels (February 2019)—the first time it has surpassed pre-pandemic levels in eight months.

•             Capacity (measured in available cargo tonne-kilometers, ACTK) was up 8.6% compared to February 2022. The strong uptick in ACTKs reflects the addition of belly capacity as the passenger side of the business continues to recover. International belly-capacity grew by 57.0% in February year-over-year, reaching 75.1% of the 2019 (pre-pandemic) capacity.

 •            Several factors in the operating environment should be noted:

 o            The global new export orders component of the manufacturing PMI, a leading indicator of cargo demand, continued to increase in February. China’s PMI level surpassed the critical 50-mark indicating that demand for manufactured goods from the world’s largest export economy is growing.

o             Global goods trade decreased by 1.5% in January; this was a slower rate of decline than the previous month of -3.3%.

o             The Consumer Price Index for G7 countries decreased from 6.7% in January to 6.4% in February. Inflation in producer (input) prices reduced by 2.2 percentage points to 9.6% in December (last available data).

”The story of air cargo in February is one of slowing declines. Year-on-year demand fell by 7.5%. That’s half the rate of decline experienced in January. This shifting of gears was sufficient to boost the overall industry into positive territory (+2.9%) compared to pre-pandemic levels.  An optimistic eye could see the start of an improvement trend that leads to market stabilization and  a return to more normal demand patterns after dramatic ups-and-downs in recent years,” said Willie Walsh, IATA’s Director General.

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

Total Market      100.0%  -7.5%     8.6%      -7.9%     45.6%

Africa    2.0%      -3.4%     4.7%      -3.9%     46.8%

Asia Pacific          32.4%    -6.0%     19.9%    -12.8%  46.4%

Europe 21.8%    -15.3%  -1.5%     -9.4%     57.4%

Latin America     2.7%      -2.7%     27.6%    -11.2%  36.1%

Middle East        13.0%    -8.1%     9.3%      -8.4%     44.5%

North America  28.1%    -3.2%     2.8%      -2.5%     40.0%

1 % of industry CTKs in 2022  2 Change in load factor  3 Load factor level

February Regional Performance

•             Asia-Pacific airlines saw their air cargo volumes decrease by 6.0% in February 2023 compared to the same month in 2022. This was a significant improvement in performance compared to January (-19.0%).  Airlines in the region benefitted from China’s reopening, which saw restrictions lifted and economic activities resumed. Available capacity in the region increased by 19.9% compared to February 2022 as more and more belly capacity came online from the passenger side of the business.

•             North American carriers posted a 3.2% decrease in cargo volumes in February 2023 compared to the same month in 2022. This was a solid improvement in performance compared to January (-8.7%).  Notably, the region saw a significant increase in international demand in February which boosted its market share in international cargo traffic to beyond pre-pandemic levels (21.7% in Feb 2023 versus 18.2% in Feb 2019). Capacity increased 2.8% compared to February 2022.

•             European carriers saw the weakest performance of all regions with a 15.3% decrease in cargo volumes in February 2023 compared to the same month in 2022. This was an improvement in performance compared to January (-20.4%). Airlines in the region continue to be most affected by the war in Ukraine. Capacity decreased 1.5% in February 2023 compared to February 2022.

•             Middle Eastern carriers experienced an 8.1% year-on-year decrease in cargo volumes in February 2023. This was a slight improvement to the previous month (-11.8%). Capacity increased 9.3% compared to February 2022.

•             Latin American carriers reported a 2.7% decrease in cargo volumes in February 2023 compared to February 2022. This was a drop in performance compared to January which saw a 4.6% increase. Capacity in February was up 27.6% compared to the same month in 2022. 

•             African airlines saw cargo volumes decrease by 3.4% in February 2023 compared to February 2022. This was an improvement in performance compared to the previous month (-9.5%). Notably, the Africa to Asia route area experienced significant cargo demand growth in February, up 39.5% year-on-year. Capacity was 4.7% above February 2022 levels.