The gradual route to recovery to pre-Covid market conditions continued for the global air cargo industry in August for a fourth-consecutive month, according to fresh volume and yield data from industry analysts CLIVE Data Services and TAC Index.
Year-on-year growth for the full four weeks of August showed a further narrowing of the gap in international air cargo volumes to -17% versus August 2019. This compares to a -41% YOY disparity in April – and since then month-on-month demand has improved. Capacity gains, however, have added to the downward pressure on both CLIVE’s ‘dynamic load factor’ and average yields.
In August, the receding gap in the year-over-year decline between capacity and demand resulted in a global dynamic load factor drop from 70% in July to 68% last month, but this is still exceptionally high considering that August is traditionally air cargo’s ‘slack season’ – registering at 8% points higher than the corresponding performance in August 2019, says CLIVE managing director, Niall van de Wouw.
Looking at traffic flows from China, the company’s analyses for August confirm that previous concerns of hardly any demand for capacity once the PPE peak subsided have not materialised. Volumes in the last week of August were ‘just’ 4% less than for this same week in 2019, “not great, but by no means a disaster,” he adds.
“Our August data shows the year-over-year decline in volumes is decreasing. The capacity crunch is still there but is becoming slightly less and, as a result, load factors and yields are going down and becoming closer to pre-Covid levels, even though they are still elevated.”
He points out that whereas cargo has often been regarded as the ‘freeloader’ of the airline industry because it has always been a by-product of far greater passenger revenues, right now it is passengers who are the ‘freeloaders’ because cargo is the main source of revenue for many airlines and helping to get passenger flights back into the air.
“The massive uncertainty is when will passenger demand return and reverse the tables? The huge idle fleet of passenger aircraft needs to start flying again but no one is expecting that to happen soon in terms of great quantities of capacity. In the meantime, air cargo will continue to have its day in the sun and combination carriers will have to hope this can sustain their slimmed down operations until passenger confidence and bookings return.”
