THE International Air Cargo Association (IATA) remains optimistic that the air cargo market will begin to improve in the months ahead despite current market challenges, reports London's Air Cargo News.
IATA stated that air cargo demand dropped 11.2 per cent year on year in April, while cargo load factors slipped 5.2 points a year ago to 51.6 per cent, and capacity was down two per cent.
The fall in demand is the largest since August 2020 and load factors are at their lowest level since February 2020.
IATA declared that the drop in demand was caused by the war in Ukraine leading to a fall in cargo capacity. Meanwhile, China's zero-Covid policy and associated lockdowns led to capacity challenges.
"Global goods trade has continued to decline in 2022, with China's economy growing more slowly because of Covid-19 related lockdowns among other factors," said IATA.
"The lockdowns have brought much of the world's largest port, Shanghai, to a standstill. Supply chain disruptions due to the Ukraine-Russia conflict are also adding to the downward pressure on trade."
New export orders are shrinking in all markets except the US.
Still, IATA remained optimistic.
Said IATA director general Willie Walsh: "The combination of the war in Ukraine and Covid-19 lockdowns in China have pushed up energy costs, intensified supply chain disruptions, and fed inflation."
"The operating environment is challenging for all businesses, including air cargo. But with China easing lockdown restrictions, there is cause for some optimism and the supply/demand imbalance is keeping yields high."
Asia Pacific airlines saw air cargo volumes decrease 15.8 per cent in April 2022 compared with the same month in 2021.
IATA pointed out that was the weakest performance of all regions and slower than the previous month.
"Airlines in the region have been heavily impacted by lower trade and manufacturing activity due to Omicron-related lockdowns in China," said IATA.
North American carriers posted a 6.6 per cent decrease in cargo volumes in April compared with a year earlier.
"Demand in the Asia-North America market declined significantly, however, other key routes such as Europe - North America remain strong," said IATA.
European carriers registered a 14.4 per cent drop in demand in April. Middle Eastern carriers experienced an 11.9 per cent year-on-year decrease in cargo volumes in April.
"Significant benefits from traffic being redirected to avoid flying over Russia failed to materialize," said IATA. "This is likely due to persisting supply chain issues in Asia."
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