African airlines cargo demand down 1.8% in 2023

African airlines reported a decrease in demand of 1.8 percent (- two percent for international demand) in 2023 and an increase in capacity of 5.6 percent (+ five percent for international operations).

For December 2023, African airlines posted the weakest performance among all regions with a 1.2 percent decrease in demand (-1.4 percent for international operations) compared to 2022. Capacity increased 7.4 percent (+6.8 percent for international operations) during the same period, according to the latest update from the International Air Transport Association (IATA).

Global demand zooms in December
"Global demand for air cargo was 10.8 percent above 2022 levels (+11.5 percent for international operations) in December 2023. This was the strongest annual growth performance over the past two years. Global capacity was 13.6 percent above 2022 levels (+14.1 percent for international operations)."

Full-year demand reached a level just slightly below 2022 and 2019, the update added.

"Global full-year demand in 2023, measured in cargo tonne-kilometres (CTKs), was down 1.9 percent compared to 2022 (-2.2 percent for international operations). Compared to 2019, it was down 3.6 percent (-3.8 percent for international operations).

"Capacity in 2023, measured in available cargo tonne-kilometres (ACTKs), was 11.3 percent above 2022 (+9.6 percent for international operations). Compared to 2019 (pre-Covid) levels, capacity was up 2.5 percent."

Willie Walsh, Director General, IATA says: “Despite political and economic challenges, 2023 saw air cargo markets regain ground lost in 2022 after the extraordinary Covid peak in 2021. Although full year demand was shy of pre-Covid levels by 3.6%, the significant strengthening in the last quarter is a sign that markets are stabilising towards more normal demand patterns. That puts the industry on very solid ground for success in 2024. But with continued, and in some cases intensifying, instability in geopolitics and economic forces, little should be taken for granted in the months ahead."

Some indicators to note include:

*Global cross-border trade recorded growth for the third consecutive month in October, reversing its previous downward trend, the update added.

"December inflation in both the United States and the E.U., as measured by the corresponding Consumer Price Indices (CPI), stayed below 3.5 percent year-on-year. China’s CPI, however, indicated deflation for the third consecutive month, raising concerns of an economic slowdown.

"Both the manufacturing output and new export order Purchasing Managers Indexes (PMIs) – two leading indicators of global air cargo demand — continued to hover below the 50-mark in December, usual markers for contraction."

Red Sea disruption
In November and December, air cargo experienced a modest rise in demand and yields due to disruptions in the Red Sea, the update added.

"The following was observed when comparing data for the week commencing November 4, 2023 and the week ending December 9, 2023:

* A one percent increase in global air cargo demand coupled with a five percent rise in yields;

*In the Asia-Pacific region, demand grew by two percent and yields by six percent;

*A one percent increase in demand between China and the rest of the world and a 11 percent increase in yields;

*Europe's demand remained steady but yields increased by three percent;

*In the Middle East, demand was constant with a four percent rise in yields."

Data for the last half of December showed a normalisation of demand and yields, says the update.

"The recent disruption to maritime routes in the Red Sea has seen some shippers pivot to air cargo," says Walsh. "The increased demand saw a spike in air cargo yields on related trade lanes. A similar spike is expected in January as disruptions intensified. While not all cargo is suitable for air transport, it is a vital option for some of the most urgent shipments in extraordinary circumstances. And that is critical to the continuity of the global economy."

2023 regional performance
Asia-Pacific airlines posted a 0.9 percent increase in demand in 2023 compared to 2022 (-1.4 percent for international operations) and a capacity increase of 28.5 percent (+16.6 percent for international operations). In December, airlines in the region recorded the best performance of all regions, posting a 18.5 percent increase in demand (+15.4 percent for international operations) compared to 2022. Capacity increased 31.1 percent (+22.9 percent for international operations) during the same period.

North American carriers reported the worst year-on-year performance of all regions with a 5.7 percent decrease in demand in 2023 compared to 2022 (-4.3 percent for international operations) and a capacity increase of 0.3 percent (+2.7 percent for international operations).

European carriers posted a 3.9 percent decrease in demand in 2023 compared to 2022 (-4.1 percent for international operations). During the same period, airlines posted a capacity increase of 4.5 percent for both global and international operations. Airlines in the region continued to be most affected by the war in Ukraine.

Middle Eastern carriers reported an increase in demand of 1.6 percent for 2023 compared to 2022 and an increase in capacity of 13.5 percent (+13.6 percent for international operations).

Latin American carriers posted the strongest year-on-year performance of all regions, with a two percent increase in demand in 2023 compared to 2022 (+1.9 percent for international operations). During the same period, airlines posted a capacity increase of 13.2 percent (+16.9 percent for international operations).