The International Air Transport Association (IATA), which is the global representative body for the airline industry, has reported that global air cargo demand in July saw a continuation of the recovery trend that started in February. July’s cargo demand was just 0.8% below that for July 2022. In June, air cargo demand was down 3.4%, year-on-year (y-o-y), making this past July’s performance a noteworthy improvement. International air cargo demand in July was down only 0.4%, y-o-y.

Total air cargo capacity in July was up 11.2%, while international capacity rose 8%, y-o-y. This was owing to a surge in airliner belly hold capacity (which increased 29.3% y-o-y) as a result of the summer air travel season in the northern hemisphere.

“Compared to July 2022, demand for air cargo was basically flat,” noted IATA director-general Willie Walsh. “Considering we were 3.4% below 2022 in June, that’s a significant improvement. And it continues a trend of strengthening demand that began in February. How this trend will evolve in the coming months will be something to watch carefully. Many fundamental drivers of air cargo demand, such as trade volumes and export orders, remain weak or are deteriorating. And there are growing concerns over how China’s economy is developing. At the same time, we are seeing shorter delivery times, which is normally a sign of increasing economic activity. Amid these mixed signals, strengthening demand gives us good reason to be cautiously optimistic.”

That supply chain delays were reducing was signalled by the July global supplier delivery time Purchasing Managers Index (PMI), which stood at 51.9. Excepting China, all the major world economies recorded PMIs above 50. European PMI was 57.7, US PMI 54.2 and Japanese PMI was 50.4. Regarding inflation, in July, US consumer prices rose for the first time in 13 months, but in China both producer and consumer prices fell, which suggested possible economic deflation.

In terms of IATA’s regions, that which saw the strongest y-o-y increase in air cargo demand in July was Africa, at 2.9%. The routes between Africa and Asia saw especially strong growth, at 10.3%. African air cargo capacity rose 11%, also y-o-y. The Asia-Pacific came second, with growth of 2.7%, while capacity jumped 26% because of the return of airliner belly-hold capacity. The Middle East ranked third, with a rise in demand of 1.5%; the region’s capacity increased by 17.1%. Latin America recorded a demand increase of only 0.4%, a decline in comparison to its performance in June, which had seen a y-o-y increase of 2.2%; capacity increased by 10%.

The association’s other two regions saw their air cargo demand decrease, y-o-y. In Europe, the decline was 1.5% (while capacity increased by 5.3%). However, this was an improvement over the equivalent figure for June, which had been a fall of 3.2%. In North America, the y-o-y drop in July had been 5.2%; this was slightly better than the y-o-y decrease of 5.9% in June. North American air cargo capacity increased by only 0.5% in July.