African airlines see 2.4% drop in cargo demand in May: IATA

On Jul 5, 2023 120

Addis Ababa, July 5, 2023 (FBC) – African airlines posted a 2.4 percent decrease in demand for air cargo compared to May 2022.

This was a decline in performance compared to the previous month (-0.9 percent), according to the latest update from the International Air Transport Association (IATA).

“The growth on the Africa to Asia trade route slowed significantly in May from 18.5 percent in April to 11 percent, possibly due to the impact of the conflict in Sudan since mid-April. Capacity was up 9.2 percent.

According to logistic Update Africa, global demand, measured in cargo tonne-kilometres (CTKs), fell 5.2 percent compared to May 2022 (- six percent for international operations). Capacity, as measured by available cargo tonne-kilometres (ACTKs), rose 14.5 percent compared to May 2022, primarily driven by belly capacity which increases as demand in the passenger business recovers. Capacity is now 5.9 percent above May 2019 (pre-pandemic) levels.

Global manufacturing Purchasing Managers Index (PMI) indicates an annual contraction of 1.4 percent in new export orders and a decrease of 5.2 percent year-on-year in production PMI.

This suggests a cooling in global manufacturing demand. “Global goods trade declined 0.8 percent in April due to macroeconomic challenges and supply chain constraints.

Trading conditions appeared to favour maritime cargo as demand for container shipping contracted by 0.2 percent while air cargo demand weakened by 6.3 percent year-on-year.

The global supplier delivery time PMI increased to 54.5 in May, up from its low of 35 in October 2021, indicating shorter delivery times and some relief for supply chains.

However, this is also a sign of weaker global goods trade demand, the release added. “Trading conditions for air cargo continue to be challenging with a 5.2 percent fall in demand and several economic indicators pointing towards weakness,” says Willie Walsh, Director General, IATA.

“The second half of the year, however, should bring some improvements. As inflation moderates in many markets, it is widely expected that central bank rate hikes will taper. This should help stimulate economic activity with a positive impact on demand for air cargo”, the Director General adds.