2020 IATA Air Freight Market Analysis

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2020 IATA Air Freight Market Analysis

Hello everyone, the holidays are over before you know it, and we are officially starting 2021. IATA also provides an analysis of the air freight market as of December 2020. Then, I’ll be a porter again, extract a few paragraphs from IATA’s analysis report, and translate it for everyone to see. The content of this report feels more in line with the actual market trend than the last report. If you need the full original IATA report, you can ask me directly.


Solid end to air cargo in 2020

  • Airfreight cargo volumes this year have risen sharply from their lows in the second quarter. Global freight ton-kilometres (CTKs) fell by just 0.5% year-on-year in December. But overall for 2020, CTKs across the industry fell by 10.6% year-over-year, the largest decline since our publication in 1990. .
  • Global trade fell by 6% in 2020, slightly better than air freight. But the airlift industry also benefited when inventories began to circulate again in the second half of the year. Of course, the lack of capacity also limits the full development of the industry.
  • Actual ACTKs across the industry fell by 23.3% year-on-year in 2020. Load factor, unit price and profit all rose to an unprecedented new height. It has also helped some airlines, as well as companies that provide long-haul passenger services, not fall flat in the face of shrinking passenger profit margins
  • Airfreight cargo volumes this year have risen sharply from their lows in the second quarter. Global freight ton-kilometres (CTKs) fell by just 0.5% year-on-year in December. But overall for 2020, CTKs across the industry fell by 10.6% year-over-year, the largest decline since our publication in 1990.


Air cargo performs strongly

The airlift industry has experienced a rock-bottom rally in 2020. Industry-wide CTKs fell just 0.5% year-on-year in December, the best result since November 2019. This proves that there have been positive market trends in recent months. Although there was a sharp drop (6.2%) in November 2020 as in November 2019.


In fact, seasonally adjusted CTKs rose 3.6% from the previous month. This makes this seasonally adjusted CTKs only 2% lower than the peak season in November 2019. (figure 1).


For the full year, industry-wide CTK decreased by 10.6% in 2020 compared to 2019. This was the fastest rate of decline since the report began in 1990, slightly worse than 2009 (9.7%), but far better than passenger traffic.


Air cargo underperforms global trade in goods in 2020

In 2020, global trade has slowed down compared to the airfreight industry (6% year-on-year). The airfreight industry is in a downward trend, and it is significantly worse than other modes of transportation. Meanwhile, in the rebounding curve, the situation is reversed.


In the early years of this year, supply chains and economic activity were generally affected due to factors such as control measures and airport closures. This affects the trading industry as well as the airlift industry. In May, factory activity as well as consumer demand rebounded sharply as restrictions were lifted. This recovery trend continued until the end of the year. Even the COVID outbreak in some places has led to new restrictions in those places.


The rebound was well reflected in new global export orders, and correspondingly, the PMI (Purchasing Managers Index) broke the 50 mark in September and has remained above 50 points. Global industrial production has also recovered and is close to what it was last November.


Number of international CTKs by African airlines in 2020

African airlines led the way throughout 2020 as well as in December. Their international CTKs increased by 1.9% year-on-year in 2020, the only region worldwide to achieve this feat. In December, the indicator rose by 6.3%.

This has allowed African airlines to catch up with South American carriers. In 2020, both achieved a similar indicator of global CTKs at 2.4%.

Data by Regions of the World

In 2020, international air cargo volumes in the South America region fell by 5.2% year-on-year, but this was also stronger than the 16.8% drop observed in 2009. In December, the metric rose 3.1% year-on-year, the best monthly result since 2018. The rise was mainly due to a 2.2% year-on-year increase in Asia-North America trade in 2020. Much of North America’s consumer demand is produced in Asia.


Middle Eastern airlines’ CTKs in 2020 were down 9.5% year-on-year compared to 2019. After a brief hiatus in November, seasonally adjusted gains rose again in December, with a monthly increase of 5.5% year-on-year.


Airline cargo volumes in the Asia-Pacific region fell 13.2% year-on-year in 2020 and 3.9% year-on-year in December. Recovering in the third quarter, seasonally adjusted CTKs have increased in recent months after a disruption. This was due to higher export orders and a rebound in factory shipments. Among them, China and South Korea are particularly notable.


European airlines had similar performances. CTKs fell 16.2% year-on-year in 2020 and 5.6% year-on-year in December. Seasonal adjustments were also interrupted in November, but rebounded by 7% in December. Although the increase was the highest of any region, Europe’s recent rebound has been under pressure due to new restrictions and unfavorable economic conditions.


Latin American carriers’ 2020 CTKs declined 20.3% year over year. Recovery in the region has been slow due to the protracted crisis. Seasonal adjustments have also been repeated in recent months. In December, actual CTKs fell 19% year over year. The decline was also in line with November.


This performance is due to difficult economic conditions in markets such as Mexico, Argentina and Peru. Actual ACTKs fell by 33.6% year-on-year in 2020 as some of the region’s major carriers restructured and contracted capacity in Latin America.


Well, the IATA report is excerpted here. See you next time!

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