July air cargo demand was just 0.8% below year-earlier levels. Although demand is now basically stable compared to 2022, this is an improvement over the performance of recent months that is particularly significant given drops in global trade volumes and growing concerns about China's economy.
Global demand, measured in freight tonne kilometers (CTK*), was 0.8% below July 2022 levels (-0.4% for international operations). This is a significant improvement over the previous month's performance (-3.4%).
Capacity, measured in available cargo tonne kilometers (ACTK), increased by 11.2% compared to July 2022 (8% for international operations). The strong rebound in ACTK reflects the growth in belly capacity (29.3% year-on-year) due to the summer season.
Several factors must be taken into account in the operating environment:
In July, both the Manufacturing Purchasing Managers' Index or PMI (49.0) and the New Export Orders PMI (46.4) were below the critical threshold represented by the 50 mark, indicating a decline in global manufacturing production and exports.
Global cross-border trade contracted for the third consecutive month in June, declining 2.5% year-over-year, reflecting the cooling demand environment and difficult macroeconomic conditions. The difference between the annual growth rates of air cargo and global trade in goods narrowed to -0.8 percentage points in June. While air cargo growth still lags global trade, the gap is the narrowest since January 2022.
In July, the global supplier lead time PMI was 51.9, indicating fewer delays in the supply chain. All major economies except China had PMIs above 50. The United States, Europe and Japan recorded PMIs of 54.2, 57.7 and 50.4, respectively.
Inflation was a mixed picture in July, with the rise in U.S. consumer prices accelerating for the first time in 13 months. Meanwhile, in China, both consumer and producer prices fell, pointing to a possible deflationary economy.
"Compared to July 2022, air cargo demand remained basically stable. Considering that in June we were 3.4% below 2022 levels, that is a significant improvement. And it continues a strengthening trend of demand that began in February. How will this trend evolve in the coming months will be something to watch closely. Many fundamental drivers of air cargo demand, such as trade volumes and export orders, remain weak or are deteriorating. And there is growing concern about how China's economy is developing. At the same time, we are "We are seeing shorter delivery times, which is normally a sign of growing economic activity. In the midst of these contradictory signals,
July Regional Performance
Asia-Pacific airlines saw their air cargo volumes increase by 2.7% in July 2023 compared to the same month in 2022. This is a significant improvement in performance compared to June (-3.3%) . Carriers in the region benefited from growth on three main trade routes: Europe-Asia (3.2% year-on-year growth), Middle East-Asia (from 1.8% in June to 6.6% in July) and Africa -Asia (returning to double-digit growth of 10.3% year-on-year from -4.8% in June). Additionally, the intra-Asia trade route also performed considerably better in July, with international CTKs down 7.5% year-over-year compared to double-digit declines seen since September 2022. Available capacity in the region increased a 26,
North American carriers posted the weakest performance of all regions, with cargo volumes down 5.2% in July 2023 compared to the same month in 2022, marking the fifth consecutive month in which the region had the weakest performance. However, this is a slight improvement compared to June (-5.9%). The transatlantic route between North America and Europe saw a traffic drop of 4.3% in July, 1.2 percentage points worse than the previous month. Capacity increased by 0.5% compared to July 2022.
European airlines saw their air cargo volumes decrease by 1.5% in July compared to the same month in 2022. However, this was an improvement in performance compared to June (-3.2%). Volumes were affected due to the
aforementioned performance between Europe and North America and contractions in the Middle East-Europe (-1.2%) and within Europe (-5.1%) markets. Capacity increased by 5.3% in July 2023 compared to July 2022.
Middle East shippers saw a 1.5% year-on-year increase in cargo volumes in July 2023. This was also an improvement over the previous month's performance (0.6%). Demand on routes between the Middle East and Asia has been trending upward over the past two months. Capacity increased by 17.1% compared to July 2022.
Latin American carriers recorded a 0.4% increase in cargo volumes compared to July 2022. This is a drop in performance compared to the previous month (2.2%). Capacity in July increased by 10.0% compared to the same month in 2022.
African airlines had the strongest performance in July 2023, with a 2.9% increase in cargo volumes compared to July 2022. In particular, Africa-Asia routes saw significant growth in cargo demand (10.3%). Capacity was 11.0% above July 2022 levels.