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News Article

Air Cargo Sees Small Recovery

By Alicia Arizpe | Tue, 06/30/2020 - 11:56

Air cargo, hit by the numerous cancellations of commercial flights since the start of the COVID-19 outbreak, saw a small recovery in May, reports the International Air Transport Association (IATA). However, signs point that the industry’s recovery will be slow, added the association.

Global border closings and flight cancellations dealt a significant hit to air cargo, as about half of it travels on the bellies of passenger airplanes. Global air cargo capacity, measured in available cargo ton kilometers (ACTK) registered a 41.6 percent drop during April 2020. Demand also shrank as lockdowns halted or reduced operations at many manufacturing sectors. That same month, IATA reported a 25.6 percent decrease in cargo ton kilometers, which measure demand for cargo. May, however, brought better numbers for the sector as lockdowns and travel restrictions began to relax, reported the association. That month, capacity fell by 34.7 percent year-on-year while demand shrank by 20.3 percent. While capacity and demand continue to be significantly smaller than in 2019, these numbers point that the sector fall is decelerating from the lows it saw in April.

IATA expects that the sector will recover as production continues to gradually ramp up thanks to easing lockdowns. But the association also warns that the disruption global supply chains suffered earlier in the year will continue to be a problem. “Prospects for air cargo remain stronger than for the passenger business but the future is very uncertain. Economic activity is picking up from April lows as some economies unlock. But predicting the length and depth of the recession remains difficult,” said Alexandre de Juniac, Director General and CEO of IATA.

While all regions have been impacted, Latin American airlines continue to drag behind their peers. The region, which had already reported sharp decreases in air cargo demand and capacity during April, now reports the sharpest fall in capacity in the globe with a 51.6 percent reduction. Latin America is followed by Europe with 41.9 percent less ACTKs, Africa with 39.4 percent, Asia Pacific with 37.4 percent, North America with 27.9 percent and the Middle East with 26.0 percent. “The COVID-19 crisis is particularly challenging for airlines based in Latin America owing to strict lock-down measures,” reports IATA. Latin America also reported the second sharpest capacity reduction, 28.3 percent less than the previous year, only slightly better than Europe’s 29.5 percent drop. With a 25.2 percent reduction in capacity, the Middle East ranks third, followed by Asia Pacific with 24.6 percent, Africa with 7.4 percent and North America with 3.6 percent.

Mexico has also seen a significant drop in cargo operations. Between January and May of 2020, Mexican and foreign airlines transported 22.7 percent less cargo tons than during that same period in 2019, reports Mexico’s Federal Agency of Civil Aviation (AFAC).

Alicia Arizpe Alicia Arizpe Senior Writer