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News Article

Air Cargo Goes Up in September

By Alicia Arizpe | Wed, 11/04/2020 - 11:52

Air cargo has been gradually picking up from previous lows as manufacturing and economic activity ramp up. But the limited recovery of passenger traffic might slow down the recovery of the sector.

Globally, air cargo saw an 8 percent year-on-year decrease in September, according to the International Air Transport Association (IATA). While still below 2019 levels, it shows an uptick from the previous month’s 12.1 percent drop, which IATA credits to an increase in manufacturing and trade across many nations affected by the COVID-19 outbreak. As the pandemic spread during the early months of 2020, the World Trade Organization (WTO) estimated a global contraction in trade of 12.9 percent but a stronger June and July led the organization to revise this number to a 9.2 percent decline. WTO also expects trade to continue recovering and see a 7.1 percent increase during 2021, which can be expected due to rising demand for air cargo as the sector represents 35 percent of the world trade by value.

While demand continues increasing, capacity remains a bottleneck for the sector. About half of the world’s air cargo travels in the bellies of passenger aircraft so the significant drop in passenger traffic has greatly reduced capacity for air cargo. “For air cargo, 92 percent of the business is still there, whereas about 90 percent of international passenger traffic has disappeared,” said Alexandre de Juniac, Director General and CEO of IATA. In September, capacity shrank by 25.2 percent year-on-year measured in available cargo ton-kilometers (ACTK). This situation, as IATA points out, represents a severe lack of capacity.

During September, Latin America reported the sharpest drops in demand and capacity with a negative 22.5 percent and 36.5 percent, respectively, due to the region’s slowdown in economic activity. Air cargo in Mexico also remains below 2019 levels. The Federal Agency of Civil Aviation (AFAC), which only reports an aggregate of the first nine months of 2020, reports that cargo is down by 18.7 percent year on year. Mexico’s commercial airlines Aeroméxico, Volaris and Interjet have transported less cargo as they had to reduce their flights due to low passenger demand. Meanwhile, local cargo airlines have either grown or seen a smaller reduction in transported cargo. MCS Aerocarga de México and Mas Air are the only two local airlines that have increased their cargo operations during this period, by 110.2 percent and 21.4 percent, respectively.

Alicia Arizpe Alicia Arizpe Senior Writer