IATA’s air cargo performance data for March 2020
shows a severe capacity shortfall.

Global demand, measured in cargo tonne
kilometers (CTKs), fell by 15.2% in March compared to the previous
year (-15.8% for international markets).

Global capacity, measured in available cargo tonne kilometers (ACTKs), shrank by 22.7% in March compared to the
previous year (-24.6% for international markets).

International markets account for 87% of air
cargo. Belly capacity for international air cargo shrank by 43.7%
in March compared to the previous year. This was partially offset
by a 6.2% increase in capacity through expanded use of freighter
aircraft, including the use of idle passenger aircraft for
all-cargo operations.

Cargo At Noi Bai International Airport in Hanoi, Vietnam. Picture by Steven Howard of TravelNewsAsia.com Click to enlarge.

“At present, we don’t have enough capacity to meet
the remaining demand for air cargo,” said Alexandre de Juniac,
IATA’s Director General and CEO. “Volumes fell by over 15% in
March compared to the previous year. But capacity plummeted by
almost 23%. The gap must be addressed quickly because vital
supplies must get to where they are needed most. For example,
there is a doubling of demand for pharmaceutical shipments that
are critical to this crisis. With most of the passenger fleet
sitting idle, airlines are doing their best to meet demand by
adding freighter services, including adapting passenger aircraft
to all-cargo activity. But mounting these special operations
continues to face bureaucratic hurdles. Governments must cut the
red tape needed to approve special flights and ensure safe and
efficient facilitation of crew.”

There are still too many examples of delays in
getting charter permits issued, a lack of exemptions on COVID19
testing for air cargo crew, and inadequate ground infrastructure
to/from and within airport environments. Air cargo needs to move
efficiently throughout the entire supply chain to be effective.
IATA urges governments to:

– Cut the paperwork for
charter operations;

– Exempt cargo crew from quarantine rules
that apply to the general population; and

– Ensure there is adequate
staff and facilities to process cargo efficiently.

While there is an immediate capacity
shortage, the collapsing economy is expected to further depress
overall cargo volumes.

Short-term analysis shows
that global manufacturing activity continued to contract in March
as government-imposed lockdowns caused widespread disruptions.
Following the sharp decline in February – which exceeded that of
the global financial crisis – the global manufacturing Purchasing
Managers’ Index (PMI) rose slightly in March but remained in contractionary territory. This improvement was due to the
stabilization of the China PMI; excluding the China outcome, the
global index fell to its lowest level since May 2009.

Looking at the prospects for the rest of 2020, the World Trade
Organization forecast gives little indication of a quick recovery.
The optimistic scenario is for a 13% fall in trade in 2020, while
the pessimistic scenario sees a 32% fall in trade in 2020. This
will deeply impact air cargo’s prospects.

One area
of demand, however, is growing sharply. Pharmaceutical shipments
are tracking at double previous-year volumes. This excludes
shipments of medical equipment.

“The capacity
crunch will, unfortunately, be a temporary problem,” said de Juniac.
“The recession will likely hit air cargo at least as severely as
it does the rest of the economy. To keep the supply chain moving
to meet what demand might exist, airlines must be financially
viable. The need for financial relief for airlines by whatever
means possible remains urgent.”

Air Cargo Regional
Performance – March 2020

airlines saw demand for international air cargo fall by 15.9% in
March 2020, compared to the same month in 2019. Seasonally
adjusted cargo demand fell by 3.0% compared to February 2020, to
levels last seen in the third quarter of 2013. International
capacity decreased 27.8%.

North American carriers
reported a decline in international demand of 13.3% annually in
March which was more than double the pace of decline in February
(-6.1%). Cargo volumes on the Europe-North America trade lane were
affected the most (down 22% year-on-year) in March. International
capacity decreased 19%.

Qatar Airways Boeing 747-8F reg: A7-BGA. Picture by Steven Howard of TravelNewsAsia.com Click to enlarge.

European carriers reported
an 18.8% annual drop in international cargo volumes in March, much
sharper than the outcome for February (-5.2%). Intra-Europe demand
declined by 32.6% year-on-year due to widespread shutdowns in the
manufacturing sector across the region. The larger Europe-North
America and Europe-Asia markets also recorded substantial declines
this month. International capacity decreased 27.6%.

Middle Eastern carriers reported a decline of 14.1% year-on-year
following growth of 4.3% in February. Among all routes to/from the
Middle East, the sizeable Europe and Asia trade lanes recorded
falls in the order of 20% in March, while the smaller Africa
market saw a decline of around 30%. International capacity
decreased 20.4%.

Latin American carriers posted the
sharpest fall—a 19.3% year-on-year decline in international
demand. This was a significant deterioration compared to February
(-0.5%). Declines were widespread but most severe for
Central-South America with volumes down around 35% year-on-year.
International capacity decreased 37.6%.

airlines were less affected by disruptions in March. They saw
year-on-year growth in international CTKs fall by1.2% following
the positive annual outcomes in January and February. The
Africa-Asia market was the only trade lane which continued to post
growth in March, with volumes up almost 10% year-on-year.
International capacity decreased 8.2%.

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