Global air cargo demand continued to grow in July, supported by steady trade activity, expanding manufacturing output, and strong demand across key international markets.
According to the International Air Transport Association (IATA), total air cargo demand, in terms of cargo tonne-kilometers (CTKs), increased 3.9% year-over-year in July, while international cargo traffic increased by 4.7%. “The continued expansion of cross-border traffic indicates that global supply chains and merchandise trade remained favorable for air freight despite ongoing geopolitical and trade-policy uncertainty,” noted Marie Owens Thomsen, IATA’s Senior Vice President Sustainability and Chief Economist.
IATA reported that airlines in Asia-Pacific, Europe, and North America accounted for more than 90% of the overall increase in cargo volumes. Cross-border trade remained a key driver, supported by positive merchandise trade trends and continued expansion in global manufacturing activity.
Dedicated freighter operations also saw an uptick during the month. Freighter traffic increased 13.9% year-over-year, marking the strongest expansion in more than five years. In contrast, belly-hold cargo capacity carried on passenger aircraft declined 7.0%, largely linked to passenger network disruptions. “Dedicated freighters gained market share as belly-hold traffic declined, possibly reflecting demand for larger or specialist shipments and the operational flexibility that freighters can provide,” Thomsen explained.
Regional trade lanes linked to Asia continued to perform strongly. The Asia-North America corridor grew 9.2% year-over-year, marking its sixth consecutive month of growth. According to IATA, this was supported by “elevated Trans-Pacific container rates, constraints at several Chinese hubs, and tariff-related front-loading”.
The Europe-Asia corridor continued to show positive growth, registering a rise of 3.1 per cent and thereby extending its period of expansion to 41 months running. Yet, growth slowed down as compared with June due to weaker e-commerce demand resulting from changes to the European regulations on low-value imports.
IATA also reported that global merchandise trade volumes increased 7.5% year-over-year, while manufacturing activity continued to expand, helping sustain demand for air freight services. However, even with healthy volume growth, airlines are facing rising cost pressures. IATA observed that jet fuel prices rose 12.2% month-over-month and were 56.9% higher than the previous year, raising operating expenses across the industry.
Even though there has been healthy growth in volume, airlines are experiencing increasing cost pressures. The IATA reports that jet fuel prices went up by 12.2% from month to month and were 56.9% higher than the previous year, thus raising operating expenses in the industry.
For the future, the IATA anticipates that the air cargo market will still be supported by manufacturing activity, export orders, and international trade. At the same time, carriers are keeping a close eye on fuel costs, geopolitical developments, and changing trade policies since these could affect market performance in the coming months.
Source: IATA Press Release, IATA July Outlook