Air Cargo Market Analysis December 2023

Air cargo closing the year with strong momentum

• In December, global air cargo traffic saw a notable year-on-year increase of 10.8%, marking the most
substantial annual growth in air cargo tonne-kilometers (CTKs) over the past two years. This surge brought the
annual average 2023 figures to within 1.9% of the traffic seen in 2022.
• Global International Cargo Tonne Kilometres (CTKs) increased year-over-year by 11.5% in December, with
growth in all major trade lanes. This resulted in the year 2023 concluding just 2.2% below the international
traffic level reached in 2022.
• December saw new highs in Available Cargo Tonne-Kilometers (ACTKs), a metric for global air cargo capacity.
This increase, largely due to the expansion of international passenger belly capacity, resulted in a 13.6% year-
on-year (YoY) rise in December's ACTK. Consequently, 2023 concluded with an 11.3% increase in total air
cargo capacity compared to 2022.
• The expansion in global air cargo capacity also resulted in a small drop in cargo load factors (month-on-
month), closing the year at 44.0% on average.

December continues strong growth in air cargo Seasonally Adjusted (SA) Cargo Tonne Kilometres
traffic (CTKs) maintained their upward trajectory, increasing
by 10.7% year-on-year (YoY) this month. The continued
Global air cargo demand reached 22.8 billion CTKs in
annual growth in SA CTKs, evident since August,
December, the highest traffic in two years,
markedly strong reverting from the declining trend
representing a 10.8% increase year-on-year (YoY) –
observed throughout 2022. This underscores the
the most significant annual growth since October
progressive recovery of the global air cargo market,
2021. While this performance is partly due to a base
concluding 2023 on a robust note with strong
effect (the decline in CTKs for most of 2022), it also
momentum moving forward.
reflects strong, continuous YoY demand growth over
the past four months and robust month-on-month Cargo capacity sustained double-digit growth
growth since April. This narrows the gap between throughout 2023
2023 and the previous year to 1.9% yet remains 3.6%
In December, air cargo capacity, measured in Available
below the total air cargo traffic achieved in 2019.
Cargo Tonne Kilometres (ACTKs), reached 49.8 billion.
(Chart 1).
This figure exceeds the levels of 2022 and 2019 by
Chart 1 – Global CTKs (billions per month) 13.6% and 5.7%, respectively. Annually, 2023's air
cargo capacity was over 10% higher than that of 2022.
Industry CTKs (billions per month)
25 This growth was largely attributed to Asia Pacific
Actual CTKs Seasonally-adjusted CTKs
24 carriers, who recorded a 28.5% increase from 2022
23 and surpassed their 2019 capacity by 6.7% (Chart 2).
22

21

20

19

18

17

16

15
May-23
Sep-23
Jan-17
May-17
Sep-17
Jan-18
May-18
Sep-18
Jan-19
May-19
Sep-19
Jan-20
May-20
Sep-20
Jan-21
May-21
Sep-21
Jan-22
May-22
Sep-22
Jan-23

Sources: IATA Sustainability and Economics, IATA Monthly Statistics

Air cargo market in detail - December 2023

World
December 2023 (% year-on-year) December 2023 (% ch vs the same month in 2019)
share 1
CTK ACTK CLF (%-pt) CTK ACTK CLF (%-pt) CLF
TOTAL MARKET 100.0% 10.8% 13.6% -1.2% 2.3% 5.7% -1.5% 45.9%
International 86.9% 11.5% 14.1% -1.2% 2.5% 6.3% -1.9% 51.2%
Note 1: % of industry CTKs in 2022

Air Cargo Monthly Analysis – November 2023 1

Chart 2 – Global ACTKs (billions per month) factor on international routes reached 49.9%,
surpassing 2019 levels by 0.8%. (Chart 4).
Industry ACTKs (billions per month)
55
Actual ACTKs Seasonally-adjusted ACTKs Chart 4 – Industry cargo load factor (percent)
50 60%

58%
45 56%

54%
40
52%

35 50%

48%
30 46%

44%
25
42%

40%

Sources: IATA Sustainability and Economics, IATA Monthly Statistics

The industry's Available Cargo Tonne Kilometers Sources: IATA Monthly Statistics

(ACTKs) consistently exhibited double-digit growth Sustained air cargo recovery in line with positive trade
year-on-year during the second half of the 2023. The and production globally
year concluded with an 11.3% enhancement
compared to 2022 and a 2.5% increase over pre- While the November data remains pending, global
pandemic levels. Within this upward trend, cross-border trade experienced growth for the third
international air cargo capacity registered a 9.6% consecutive month in October. This reverses the
rise from the previous year. Significantly, capacities downward trend observed during the summer. This
carried by international passenger bellies attained upturn signifies a stabilization in global cross-border
220 billion ACTKs in 2023, reflecting a notable 36% trade towards the end of 2023, which stood
growth from the preceding year. Conversely, global approximately 5% above the 2019 level, based on an
dedicated freighters maintained stability, carrying average of the first 10 months' data currently available.
205 billion ACTKs of international air cargo traffic Importantly, both global cross-border trade and
during the year, marginally lower than the 2022 figure industrial production surpassed pre-pandemic levels in
(refer to Chart 3). late 2020, and exceed these by 6.0% and 9.9%,
respectively, as per the latest available data.
Chart 3 – International ACTKs by cargo type (billions
per month) Buoyed by the upward trends in both production and
cross-border trade, the global air cargo recovery
International ACTKs (billions) provided by cargo type
45
sustained its momentum, registering positive growth for
Dedicated freighters Passenger belly Preighters
40 the fifth consecutive month. Seasonally Adjusted (SA)
35 Cargo Tonne-Kilometers (CTKs) demonstrated a robust
30 upward trend, finishing the year 2023 only 4% below the
25 2019 level (see Chart 5).
20

15
Chart 5 – Global goods trade and CTKs
10 Indexed, Jan 2019 = 100
110
5
105
0
100

95
Sources: IATA Sustainability and Economics, IATA Monthly
Statistics
90
Cargo load factor reached pre-pandemic levels
85
Global cross-border trade
Cargo Load Factors (CLF) are a crucial metric, 80 Industrial production

indicating the industry's demand and supply balance. 75

Seasonally-adjusted indudstry CTK

Rising CLFs benefit airlines by boosting revenue and 70

profitability for a given capacity. Attributable to

continuously expanded capacity in December, the Sources: IATA Sustainability and Economics, IATA Monthly Statistics, Netherlands CPB

industry CLF slightly decreased from the previous Manufacturing output and new export orders exhibit a
month to 45.9%, marginally below the load factors in continued marginally contracting trend across board
2022 and 2019. Concluding 2023, the air cargo sector
reported an average CLF of 44%. Notably, the load The Purchasing Managers’ Index (PMI) gauges
economic trends in manufacturing and services. A PMI

Air Cargo Monthly Analysis – November 2023 2

above 50 suggests that purchasing managers Manufacturing New Export Orders PMIs
50 = no change Global US China Europe Japan
anticipate market expansion compared to the 70

previous month, while a figure below 50 indicates 65

contraction. The degree of change is more 60

55
significant as the value deviates further from 50, with 50

50 denoting no change. Reflecting the current tight 45

financial conditions and the broader global economic 40

35
downturn, this month continued to see slight Month- 30
on-Month (MoM) contractions in manufacturing 25

output and new export order PMIs – key indicators of 20

15
global air cargo demand. Reviewing 2023, global
manufacturing experienced back-to-back
Sources: IATA Sustainability and Economics, S&P Global Markit
contractions in the second half of the year, while
global new export orders contracted throughout, Per its PMI, global manufacturing output has been
mirroring a global economic climate increasingly less contracting since June 2023. Among major
conducive to cross-border trade. This trend poses economies, Europe has faced continuous contractions
downward risks for air cargo demand (Chart 6). for nine consecutive months, lagging behind other key
Chart 6 – SA CTK growth, global manufacturing economies. Japan has also encountered consistent
output and global new export orders PMIs (50 = no contractions since June. In the United States, the PMI
change) dipped below the 50-point threshold in December,
following a three-month period of expansion. In
50 = no change
50% Seasonally adjusted industry CTKs, YoY
Global Manufacturing Output PMI
80
contrast, China, often referred to as the 'world's factory'
40%
Global New Export Orders PMI
70
due to its significant manufacturing capacity, was the
30%
sole major economy exhibiting expansion in December
20%
60 (Chart 8).
10%

0% 50 Chart 8 – Manufacturing output PMI in major economies

-10% (50 = no change)
40
-20%
Manufacturing Output PMIs
-30% 50 = no change Global US China Europe Japan
30
65
-40%
60
-50% 20
55
Sep-08

Sep-10

Sep-12

Sep-14

Sep-16

Sep-18

Sep-20

Sep-22
Jan-08

May-09
Jan-10

May-11
Jan-12

May-13
Jan-14

May-15
Jan-16

May-17
Jan-18

May-19
Jan-20

May-21
Jan-22

May-23

50
Sources: IATA Sustainability and Economics, IATA Monthly Statistics, S&P Global Markit 45

40
The PMIs for new export orders were seen below the 35
50 critical line across the border in December, this 30

includes US, China, Europe, Japan, and globally on 25

average. 20

15
In the United States, the PMIs for new export orders
dipped below the 50-point threshold again in Sources: IATA Sustainability and Economics, S&P Global Markit
December, following the sole expansion observed in
November 2023. In China, despite a brief expansion Soft Inflation observed in major Economies
in the first half of the year, PMIs remained below the Despite a minor increase in December, the inflation of
50-point mark for the second half of 2023. consumer prices, as gauged by the annual change in the
Meanwhile, in Europe and Japan, PMIs consistently Consumer Price Index (CPI), stayed below 3.5% in both
stayed below the 50-point threshold throughout the the US and Europe. In Japan, inflation further declined to
year, indicating continuous monthly contractions, as 2.6% in December. Concurrently, China recorded
depicted in Chart 7. The situation is particularly negative annual growth in its CPI for the third
concerning in Europe, where the PMI for new export consecutive month, marking the fourth occurrence of
orders not only remained below 50 but also fell below deflation this year. This trend heightens concerns over
45 for most months in 2023. This decline was an impending economic slowdown (Chart 9).
primarily due to heightened geopolitical conflicts and
the global economic slowdown.
Chart 7 – New export orders PMI in major economies
(50 = no change)

Air Cargo Monthly Analysis – November 2023 3

Chart 9 – Headline CPI and PPI inflation (YoY) in major Jet fuel price versus Air cargo yields with surcharges
(indexed, Jan 2019 = 100)
economies 250 Jet fuel prices Cargo yields with surcharges
50%
US PPI China PPI EU 27 PPI Japan PPI

US CPI China CPI EU 27 CPI Japan CPI 200

40%

30% 150

20%
100

10%
50

0%
0

-10%

-20% Source: IATA monthly statistics, IATA Jet fuel price monitor, CargoIS

Strong CTK growth in Middle Eastern and Asian trade

Sources: IATA Sustainability and Economics, Macrobond
lanes in December, positive annual growth across the
board
On the other hand, the Producer Price Index (PPI),
which monitors changes in in the selling prices In December, all major trade lanes reported positive
received by domestic producers for their output, YoY growth, reflecting strong momentum. Reviewing
demonstrated regional variations in December. Data 2023, the Africa-Asia market demonstrated the most
indicates a modest rise in the US, while inflation on the notable growth, exceeded that of the previous year by
producer side remained below 1%. Concurrently, double digits on average. This market achieved
China has been experiencing deflation since mid- positive YoY growth for the majority of the year,
2022, mirroring the concerns noted on the consumer including a significant 37% increase in February
front. The December PPI data for the EU 27 countries following China's reopening. In the latter half of 2023,
and Japan are still pending. However, November the Europe-Asia, Europe-Middle East and Middle East–
recorded the seventh consecutive month of deflation Asia trade lanes also registered substantial growth,
in the EU 27 countries, and a continual softening of outpacing other lanes towards the year's end. This
inflation in Japan throughout 2023 up to November increase is partly attributed to regional conflicts,
(Chart 9). particularly in the Red Sea. These conflicts led to major
disruptions in conventional sea freight routes. As a
The global price of oil significantly impacts consumer
result, manufacturers and shippers increasingly opted
prices. Likewise, the global jet fuel price is a key
for air cargo as an alternative method for transporting
determinant of airline operating costs. The IATA jet
their goods (Chart 11).
fuel monitor keeps track of the latest trends in jet fuel
prices. Jet fuel prices saw a decrease of 20% from Trade lanes involving North America, specifically North
their September peak, concluding the year at USD America–Europe and North America–Asia, both
104.4 per barrel (refer to Chart 10). On average, the jet recorded their second consecutive month of positive
fuel price in 2023 was 19% lower than its 2022 growth in international CTKs in December. However, air
average, yet it remained 41% higher than the 2019 cargo traffic for the year 2023 fell below the levels of
level. 2022. Within-Asia and Within-Europe air cargo traffic
also experienced an annual decline. Despite these
Owing to the relatively high jet fuel prices and air cargo
challenges, an upward trend across all trade lanes is a
load factors, air cargo yields, including surcharges,
positive indication.
saw a modest month-on-month increase of 0.8% in
December on top of the significant rise observed in Chart 11 – International CTK growth (YoY) by route area
November. The conflict in the Middle East and 120%
International CTK growth by route area, YoY

subsequent supply chain disruptions in container 100%

Eur-Asia
Asia-NthAm
NthAm-Eur
Within Asia
shipping added further upward pressure on air cargo 80%
ME-Asia ME-Eur
Afr-Asia Within Eur
yields. On an annual basis, cargo yields in 2023 60%
decreased by 32% from the historic highs of 2022, yet 40%
remained 42% higher than the pre-pandemic levels. 20%

Chart 10: Jet fuel price and air cargo yields including 0%

surcharges (indexed, Jan 2019 = 100) -20%

-40%

-60%

Sources: IATA Sustainability and Economics, IATA Monthly Statistics

Air Cargo Monthly Analysis – November 2023 4

Air cargo market in detail - December 2023
World
December 2023 (% year-on-year) December 2023 (% ch vs the same month in 2019)
share 1
CTK ACTK CLF (%-pt) CTK ACTK CLF (%-pt) CLF
TOTAL MARKET 100.0% 10.8% 13.6% -1.2% 2.3% 5.7% -1.5% 45.9%

Africa 2.0% -1.2% 7.4% -3.6% -3.4% -12.2% 3.7% 41.0%

Asia Pacific 32.4% 18.5% 31.1% -5.1% 0.6% 11.0% -5.0% 47.9%

Europe 21.8% 8.6% 7.4% 0.6% -7.3% -8.6% 0.8% 56.2%

Latin America 2.7% 6.4% 3.5% 0.9% 3.9% 1.8% 0.6% 31.6%

Middle East 13.0% 18.3% 17.7% 0.2% 4.9% 10.2% -2.3% 45.5%
North America 28.1% 2.0% 2.4% -0.2% 12.8% 9.7% 1.1% 40.3%

International 86.9% 11.5% 14.1% -1.2% 2.5% 6.3% -1.9% 51.2%

Africa 2.0% -1.4% 6.8% -3.5% -2.8% -11.9% 3.9% 42.1%

Asia Pacific 29.7% 15.4% 22.9% -3.5% 2.0% 11.1% -4.8% 54.1%

Europe 21.5% 8.7% 7.5% 0.6% -7.8% -9.3% 0.9% 57.8%

Latin America 2.3% 6.3% 4.2% 0.7% 5.8% 11.3% -1.9% 35.8%

Middle East 13.0% 18.3% 17.8% 0.2% 4.9% 10.3% -2.4% 45.8%

North America 18.4% 5.9% 8.5% -1.2% 17.0% 16.6% 0.2% 48.4%

Note 1: % of industry CTKs in 2022

Note 2: the total industry and regional grow th rates are based on a constant sample of airlines combining reported data and estimates for missing observations. Airline traffic is allocated
according to the region in w hich the carrier is registered; it should not be considered as regional traffic. Historical statistics are subject to revision.

Air cargo market in detail - 2023

World Year-on-year % Year-on-year % vs 2019

1
share
CTK ACTK CLF (%-pt) CTK ACTK CLF (%-pt) CLF (level)
TOTAL MARKET 100.0% -1.9% 11.3% -5.9% -3.6% 2.5% -2.7% 44.0%
Africa 2.0% -1.8% 5.6% -3.3% 6.7% -10.7% 7.1% 43.3%
Asia Pacific 32.4% 0.9% 28.5% -12.5% -6.9% 6.7% -6.7% 45.7%
Europe 21.8% -3.9% 4.5% -4.5% -12.6% -12.9% 0.2% 52.0%
Latin America 2.7% 2.0% 13.2% -3.7% -1.7% 1.8% -1.2% 33.9%
Middle East 13.0% 1.6% 13.5% -5.1% -0.1% 6.4% -2.8% 43.8%
North America 28.1% -5.7% 0.3% -2.5% 7.1% 8.7% -0.6% 39.0%

International 86.9% -2.2% 9.6% -6.0% -3.8% 0.0% 0.8% 49.9%

Africa 2.0% -2.0% 5.0% -3.2% 7.7% -10.0% 0.5% 44.3%
Asia Pacific 29.7% -1.4% 16.6% -9.9% -5.3% 2.4% 2.2% 54.5%
Europe 21.5% -4.1% 4.5% -4.9% -13.1% -13.8% -1.8% 54.1%
Latin America 2.3% 1.9% 16.9% -5.7% 0.2% 11.7% 1.9% 38.7%
Middle East 13.0% 1.6% 13.6% -5.2% -0.1% 6.7% 3.8% 44.1%
North America 18.4% -4.3% 2.7% -3.4% 7.8% 8.1% 0.6% 46.5%
Note 1: % of industry CTKs in 2022
Note 2: The total industry and regional grow th rates are based on a constant sample of airlines combining reported data and estimates for missing observations. Airline
traffic is allocated according to the region in w hich the carrier is registered; it should not be considered as regional traffic.

IATA Sustainability & Economics

[email protected]
8 January 2024

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