Air cargo demand remains strong but Delta strain poses risk, Iata says

Demand rose 8.6% in July, compared with pre-pandemic levels, as economic conditions improved

Emirates SkyCargo. The grounding of passenger planes, which typically carry about half the world's air freight in their cargo holds, drove up prices and revenue. WAM

Strong air cargo demand continued to provide a boost for airlines around the world in July as the global economy recovered from the Covid-19 pandemic, the International Air Transport Association said.

However, the Delta coronavirus variant poses a risk to the sector's outlook, the industry body said on Wednesday.

Global demand for air freight services rose by 8.6 per cent in July, compared to pre-crisis levels in July 2019, but the growth rate slowed slightly from 9.2 per cent in June, Iata said.

Capacity continued to recover but was still 10.3 per cent down, compared with July 2019.

“July was another solid month for global air cargo demand. Economic conditions indicate that the strong growth trend will continue into the peak year-end demand period," said Iata director general Wille Walsh.

"The Delta variant of Covid-19 could bring some risks. If supply chains and production lines are disrupted, there is potential for a knock-on effect for air cargo shipments."

The grounding of passenger planes that typically carry about half the world's air freight in their cargo compartments caused prices and revenue to rise, which led some airlines to post record freight earnings in 2020 and 2021, even as overall losses mounted.

The International Monetary Fund in July maintained its global economic forecast at 6 per cent but downgraded its growth outlook for emerging market and developing economies due to uneven access to vaccines and the emergence of Covid-19 variants that are derailing the recovery.

Airlines in the Middle East posted an 11.3 per cent rise in international cargo volumes in July, compared with the same month in 2019. This was a decrease, compared with the previous month's levels of 15.8 per cent, Iata said.

"Some routes, however, are still posting strong performance, for example, on the large Middle East-Asia trade lanes," the industry group said.

Etihad Airways said in August that it had halved its operating loss in the first six months of 2021 after cargo revenue jumped 56 per cent year on year to $800 million.