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Air cargo volumes predicted to increase by 4.5pc rise next year: IATA
THE International Air Transport Association (IATA) is expecting air cargo demand to increase by 4.5 per cent in 2024 while pressure on rates is expected to bring down revenues for the sector.
The airline association said the projection of a cargo tonne km increase next year comes on the back of the International Monetary Fund's prediction of a 3.5 per cent increase in trade and follows an estimated fall of 3.8 per cent in airfreight demand this year, reports London's Air Cargo News,
African carriers are expected to post a 1.5 per cent increase in cargo demand next year, Asia Pacific 3.6 per cent, Europe 4.1 per cent, Latin America 7.7 per cent, Middle East 12.3 per cent and North America 2.1 cent.
Asked why air cargo demand was expected to increase faster than trade, IATA senior macro economist Rachel Yuting Fan explained: "The growth rate is based on a low base. Air cargo has been decreasing for the last two years, especially this year when it declined by 3.8 per cent, so the growth for next year is based on that.
She added: "Our assumptions include GDP, inflation, interest rates, the strength of the US dollar, unemployment, jet fuel prices, the pace of recovery in China and conflicts. At the moment our baseline assumption is for war not to spread and for China to have a slow recovery."
Meanwhile, IATA is expecting cargo revenues to fall by 17.3 per cent year on year in 2024 to US$111.4 billion.
The revenue decline is based on yields continuing to fall next year by 20.9 per cent, driven by the continued growth of belly capacity related to strong growth on the passenger side of the business and trade stagnation.
However, yields will remain high by historical standards, IATA said. The association pointed out that "yield progression has been extraordinary" in these last years (-8.2 per cent in 2019, +54.7 per cent in 2020, +25.9 per cent in 2021, +7 per cent in 2022, -32.2 per cent in 2023).
However, Ms Fan pointed out that cargo revenues are still expected to be around 11 per cent higher than they were in the pre-pandemic year of 2019.
This year cargo revenues are expected to be 34.8 per cent lower than 2022 at $134.7 billion.
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