Resurgent Air Cargo Markets: A Boon for Business Travelers in November 2023

November 2023 marked a significant turnaround in global air cargo markets, with the International Air Transport Association (IATA) reporting the strongest year-on-year growth in nearly two years. This resurgence is not only a result of the comparative weakness of November 2022 but also signifies a consistent four-month upward trend in air cargo demand.

According to the press release IATA, the global demand for air cargo, quantified in cargo tonne-kilometres (CTKs), saw an 8.3% surge compared to November of the previous year. This uptick was particularly notable in international operations, which experienced an 8.1% growth. This rebound can be largely attributed to the rise in belly capacity, a direct consequence of the international passenger market's ongoing recovery post-COVID.

Despite this growth, when juxtaposed with pre-COVID-19 levels (November 2019), current demand lags by 2.5%, whereas capacity has risen by 4.1%. This dichotomy sheds light on the industry's ongoing efforts to recalibrate in the wake of the pandemic.

Critical indicators worth noting include:

• Manufacturing output and new export order Purchasing Managers Indexes (PMIs), key predictors of global air cargo demand, have been hovering just below the 50-mark, signaling a slowing down of the economic deceleration.

• A consecutive three-month rise in global cross-border trade in October, reversing its prior declining trajectory.
• Inflation rates in major advanced economies, like the United States, Japan, and the EU, exhibited a moderating trend, centering around 3% in November, while China reported a second consecutive month of negative annual growth in its Consumer Price Index (CPI).
• Air cargo yields, inclusive of surcharges, have continued their upward trajectory, rising by 8.9% since October, in tandem with improving load factors – partially driven by the booming e-commerce sector, particularly deliveries from China to western markets.

Willie Walsh, IATA’s Director General, noted, "November’s 8.3% increase in air cargo demand – the most substantial year-on-year growth in almost two years – signifies a promising end to the year for the air cargo sector, despite the significant economic challenges that have persisted throughout 2023."

Regional performances in November 2023 showed a varied landscape:

• Asia-Pacific airlines led with a remarkable 13.8% increase in air cargo volumes, far surpassing the previous month's 7.6% growth. This surge was supported by a 29.6% increase in capacity, bolstered by the lifting of COVID-19 restrictions.
• North American carriers, though experiencing the weakest demand growth of 1.8%, marked a significant improvement from October's -1.8% contraction. Their capacity increased by 4.0%.
• European carriers reported a 6.7% increase in air cargo volumes, a stronger showing than October's 1.0%. Their capacity grew by 6.5%.
• Middle Eastern carriers exhibited the strongest performance with a 13.5% year-on-year increase in cargo volumes, continuing the trend from the previous month. Capacity here rose by 15.4%.
• Latin American and African carriers saw modest increases in cargo volumes, at 4.2% and 3.9%, respectively.

This robust recovery in air cargo markets is particularly advantageous for regular business travelers. The increased capacity and improved efficiency signal a more reliable and effective travel ecosystem, crucial for maintaining tight business schedules. Moreover, the environmental strides made, evident in the significant reductions in fuel burn, CO₂ emissions, and noise footprint, align with the growing eco-consciousness among business travelers and corporations, offering a sustainable yet efficient travel experience.