Hello everyone, as I said before, I will also provide you with IATA’s summary of the industry from time to time. I hope it can help you have a general understanding of the future market and industry trends. It also took this opportunity to gain an understanding of the data held by IATA and their views.
As always, I still excerpt some key content and translate it for everyone to see. Due to manual translation, some words may be inaccurately translated. If you have any questions, please feel free to contact me.
So, without further ado, let’s take a look at IATA’s February summary!
Continued strong airfreight growth momentum
- Airfreight momentum continued to grow strongly in February. CTKs across the industry increased by 9% compared to February 2019 and also increased by 4.1% compared to January this year. On a monthly basis, airfreight volumes increased by 1.5%.
- Such strong air freight demand is because the industry is experiencing a “trough rebound” recovery trend. At the same time, air transport is also taking an increasing share of global cargo transactions. This situation is also a classic development pattern that began to recover after a recession.
- Due to the inability of passenger planes to fly, the positions available to the entire industry are developing horizontally. The cargo loading rate has continued to increase, and the current loading rate in the industry is at the level of 57.5%.
The volume of goods increased sharply again
Airfreight volumes continued to climb in February thanks to better economic conditions around the world. Airfreight volumes are already starting to return to levels seen before the start of the U.S.-China trade war in 2018. (figure 1)
Source from IATA official site
Several key factors continue to support cargo demand
Macroeconomic factors still had a positive and positive impact on airfreight volumes. Global manufacturing has been largely unaffected by the new virus in 2021, with continued strong growth. The global manufacturing PMI was 53.9 in February (above 50 means an increase from the previous month).
The supply chain related to the epidemic is often affected and interrupted, which has also led to delays in the delivery of related products. This result was reflected in February as the demand for air freight for related products increased. In February, average supplier lead times extended to the second-worst level in the history of the PMI survey. This means that suppliers may be more inclined to use air freight as a transportation method to make up for late deliveries. The blockage of the Suez Canal has accelerated the emergence of supply chain bottlenecks, which is likely to be reflected in the data of certain routes next month. Because of some of the products of these routes, sea and air freight are competing for each other’s goods.
Figure 4 shows the increased importance of air freight amid the recent increase in global trade in goods. It is the same as the recovery from the global financial crisis and the recovery of global inventories from 2014 to 2016. The end of the supply chain and the resumption of economic and trade activities have likely contributed to the increased importance of air freight.
Source from IATA official site
From the perspective of the entire industry, it is easy to ignore the differences in various regions. So let’s look at the performance of each region separately.
African and North American airlines have returned to pre-crisis levels (ACTKs were up 6% and 1.9% respectively compared to February). Airline data from Latin America and Asia Pacific shows that ACTKs are still 30-40% lower than before the crisis. The February load factor was at an all-time high, higher than any February on record, at 57.5%, driven by growing global demand for storage. Regionally, Asia Pacific airlines consistently achieved the highest load factor: 69.2%, followed by European airlines: 64.1%.
The African region expanded particularly rapidly in February
African airlines lead global CTK growth. Compared to February 2019, there was a sharp increase of 44.2%. Afro-Asian trade played a decisive role in this. It is worth noting that the market share of the African market is relatively small (2% CTK share) compared to other regions in the industry. Therefore, a small change in the volume is enough to cause a huge shock.
North America continues to maintain strong growth
North American airlines’ February CTKs increased by 27.4% compared to February 2019. On a monthly basis, this month rose 0.9% from the previous month. The region’s rapid recovery is due to improving economic activity and the growing popularity of online shopping due to lockdowns in some areas. The recent government-issued $1,400 family subsidy will likely continue to expand people’s demand for online shopping. Combined with the fact that product inventories in the United States are already below average, this means that more companies need faster air freight to fill their inventory.
Most Asian trade routes are above pre-crisis levels
The CTKs of Asia-Pacific airlines in February increased by 10.5% compared to February 2019. Seasonally adjusted volumes were up 3.1%. This is also the fastest-improving region outside of Africa. As the center of the world’s manufacturing industry, the Asia-Pacific region has benefited from the rapid recovery of global manufacturing and economic activities. Almost all of the world’s trade routes are above their pre-crisis levels. (except for one line) – see Figure 7
Source from IATA official site
Recovery in the Middle East is mainly driven by growth in two key markets
Airline CTKs in the Middle East increased by 8.8% compared to pre-crisis levels and 6.8% compared to January this year. The Middle East-Asia trade route and the Middle East-North America trade route showed another month of the strongest growth (27% and 17% respectively compared to February 2019)
Europe sees improvement despite new lockdowns
European airlines rose 4.7% compared to February two years ago, and 1.3% compared to January. Although many European cities are facing new lockdown policies, the manufacturing industry in the region has not been greatly affected and continues to provide supplies for the airlift industry.
CTKs in Latin America remain in the contraction zone
Latin America was the only region where CTKs remained in contraction in February. Local airlines are carrying 20.5% less cargo than they were two years ago, and their capacity (storage) is still half of what it was before the crisis. The main weak chain in the central and southern regions shrank by about 40%. CLFs in both locations were significantly below average, which also explains their low recovery, mainly due to lower demand for cargo rather than no load.
Source from IATA official site