Global Passenger Traffic Recovers But Cargo Slows Down

While passenger traffic has steadily recovered during 2022, cargo traffic contracted during the period due to smaller export orders, reports the International Air Traffic Association (IATA). In November 2022, global air traffic reached 75.3% of November 2019 levels, while cargo demand measured in cargo tonne-kilometers (CTKs) fell 13.7% compared to November 2021. 

Traffic results suggest that consumers are enjoying the freedom to travel once more but market signals are mixed. Several indicators are positive, such as the stabilization of oil prices, the slowdown of inflation and a slight expansion in goods traded globally. However, global export orders are shrinking. Many governments also responded to China’s relaxation of COVID-19 policies with further measures that hinder travel, warns IATA.

According to the association, the global domestic market stands at 77.9% of 2019 levels. While passenger traffic within China has not recovered, no further decreases were observed. Other major domestic markets presented wide-ranging but strong traffic results in November 2022. International passenger traffic nearly doubled from last November, achieving 85.2% year on year (YoY) growth and representing 73.7% of November 2019 levels. Major international routes continued to deliver solid results and approached pre-pandemic levels. 

Latin American carriers achieved 59.2% YoY growth in international Revenue Passenger Kilometers (RPKs) during the month, placing the region 15.9% short of a full recovery. Passenger traffic between Latin America and the rest of the world continued to accelerate. North American carriers gained 69.9% YoY in international RPKs in Nov, reaching 93.9% of pre-crisis levels. This market continued to lead the recovery among global markets. 

All regions experienced a modestly positive development in seat capacity. This contrasts with the light contraction in global seat capacity observed previously, which can be explained by traffic restrictions in China.

Cargo demand has been slower to recover. Industry-wide air cargo demand slowed from 21.0 billion in October 2022 to 20.6 billion the following month. This represents a 13.7% decline compared to the same month in 2021 and is also 10.1% lower than the corresponding pre-pandemic level. Seasonally adjusted air cargo demand also softened in November. Industry-wide it contracted by 14.0% compared with November 2021, following the decline of 13.3% YoY in October. The weaker air cargo demand is a result of high inflation, which is curtailing households' spending capacity, reports IATA. The ongoing war in Ukraine also disrupted trade flows, and the unusual strength of the US dollar made commodities traded in the US dollar more expensive in local currency terms. 

The news that China removed quarantine requirements for inbound travelers and was reopening to all international travel from Jan. 8, 2023, could help further to adjust the balance of both passengers and cargo rates, says IATA. In 2019, China was the fifth largest international market in the world. Of the over 102 million seats per year, Chinese carriers accounted for a 52% share of the market. The current international market from China is just 7% of its pre-pandemic levels, according to OAG.