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News Article

Air Cargo Recovers but Still at Low Levels

By Alicia Arizpe | Tue, 09/29/2020 - 12:04

Air cargo is seeing a small recovery from its lowest point earlier this year as borders open and international flights resume. However, recovery is smaller and slower than previously estimated, warns the International Air Transport Association (IATA), as a large percentage of the world’s commercial fleets remains grounded due to poor demand for passenger traffic.

The importance of resilient logistic networks that guarantee the timely delivery of necessary goods and life-saving medical equipment rose to the spotlight during the COVID-19 outbreak. Air cargo capacity was severely hit earlier this year as airlines around the world grounded their fleets of passenger aircraft. Around half of the world’s cargo travels in the bellies of passenger aircraft, so the sharp drop in passenger traffic landed a hit in the cargo industry and forced companies to hire chartered airplanes to ensure the sustainability of their supply chains. As passenger traffic begins to climb from the slump of 2Q20, air cargo capacity has also seen gradual increases but these are still below 2019 levels, warns IATA.

Global air cargo capacity saw a 29.4 percent year-on-year contraction during August, albeit it was slightly larger than the 31.8 percent year-on-year drop it saw during July. IATA explains that belly capacity in passenger flights is down by 67 percent, which is only slightly offset by the 28.1 percent increase in freighter capacity. The sharpest drop was felt in Latin America as the region saw 43.5 percent less capacity. Demand is also down. Globally, air cargo demand measured in cargo ton kilometers (CTK) shrank by 12.6 percent year-on-year. Again, the Latin American region saw the sharpest drop, reporting 27.3 percent less cargo than in August 2019. The region also faces the sharpest decrease in international capacity, with a 38.5 percent fall.

Mexico has also seen a sharp reduction in air cargo during this period. The country’s Federal Agency of Civil Aviation (AFAC) reports that from January to August 2020, Mexico transported 21 percent less cargo than during that same period in 2019. By the end of August, airlines had transported a total of 447,042 tons, of which Mexican airlines transported a total of 217,648 tons, representing 48.7 percent of the market. Grupo Aeroméxico, which holds 10.6 percent of the Mexican air cargo market, transported 41.0 percent less cargo during this period. This was the second sharpest drop among Mexican airlines, only after Interjet’s 68.4 percent contraction in air cargo. On the other hand, some cargo airlines such as MCS Aerocarga de México and Mas Air have grown in air cargo transportation, 88.1 percent and 16 percent respectively.

Alicia Arizpe Alicia Arizpe Senior Writer