Russia-Ukraine conflict set to hit air cargo markets amid airspace closures, Iata says

Capacity is expected to come under more pressure and air freight rates are likely to rise globally

Workers load relief supplies of Swiss Humanitarian Aid for Ukraine population on to an aircraft at Zurich Airport. EPA

The Russia-Ukraine conflict is expected to negatively affect global air cargo markets as airspace closures sever many countries' direct connections to Russia, although it is too soon to assess the magnitude of the impact, the International Air Transport Association (Iata) said.

Cargo carried to, from and within Russia accounted for just 0.6 per cent of global air cargo in 2021, so the overall impact on markets is expected to be low, Iata said in its monthly cargo update on Thursday.

“We can expect cargo markets to be affected by the Russia-Ukraine conflict,” Willie Walsh, Iata's Director General, said. “Sanction-related shifts in manufacturing and economic activity, rising oil prices and geopolitical uncertainty are converging. Capacity is expected to come under greater pressure and rates are likely to rise. To what extent, however, it is still too early to predict.”

Strong air cargo demand was one of the few bright spots for the global aviation industry battered for two years by the Covid-19 pandemic. Russia's military offensive in Ukraine — which has triggered sanctions on the country — and skyrocketing oil prices are likely to throw a spanner in the works.

International airlines are suffering from a sharp rise in oil prices and the additional cost of rerouting flights to avoid Russian airspace, which is expected to drive up ticket prices and air cargo rates.

Oil prices surged past $130 a barrel on Tuesday, their highest level since 2008, after US President Joe Biden announced that the US would ban crude, gas and coal imports from Russia.

Prices eased as the UAE envoy to the US said the country supports increasing oil output in tight market conditions.

A Ukrainian serviceman walks past the vertical tail fin of a Russian Su-34 bomber lying in a damaged building in Kharkiv, Ukraine. AP Photo

An apartment building damaged after shelling in Kharkiv, Ukraine. AP Photo

A woman puts her head in her hands as she sits on a cot in a shelter, set up for displaced persons fleeing Ukraine, inside a school gymnasium in Przemysl, Poland. AP Photo

Belarussian and suspected Russian helicopters on the flight line at Machulishchy Air Base outside Minsk, Belarus. AP Photo

Children look on as people fleeing Russia's invasion of Ukraine shelter in a school, in Drohobych, Ukraine. Reuters

Families eat in the shelter. Reuters

A woman looks out from a building damaged by Russian shelling in Mykolaiv, 100 kilometres away from Odesa, western Ukraine. AFP

A wounded Ukrainian man waits in the corridor of the central hospital of Mykolaiv. AFP

An elderly woman is carried in a shopping cart after being rescued from Irpin, on the outskirts of Kyiv, Ukraine. AP

A woman reacts as a train carrying children from Kyiv's Central Children's Hospital leaves the Ukrainian capital on its way to Lviv. Reuters

A girl sits in an improvised bomb shelter in Mariupol, Ukraine. AP

An elderly woman is coated in snow as she sits in a wheelchair after being rescued from Irpin. AP

Belarusian volunteers take part in military exercises at the Belarusian Company base in Kyiv. AP

Lessa, left, director of a nursery school turned into a refugee shelter, cries as she hugs Olega, who arrived from Kyiv with her baby, near Lviv. EPA

Ukrainians pass a damaged bridge as they flee from Irpin. AP

A man carries an elderly woman as people continue to leave Irpin. AP

A soldier stands on a barricade made of sandbags in central Odesa, Ukraine. Reuters

A charred Russian tank and captured tanks in the Sumy region. Reuters

People rest at a temporary shelter for Ukrainian refugees in Przemysl, Poland. AFP

Ukraine's ambassador to the Netherlands, Maksym Kononenko, third right, and his wife Tetiana Doroshenko, fourth left, attend a meeting of members of the Ukrainian community with Dutch King Willem-Alexander, third left, and Queen Maxima, second left, to discuss the situation in Ukraine, in The Hague. EPA

A Ukrainian soldier looks at the destruction after shelling in Ukraine's second-largest city of Kharkiv. AFP

A refugee holds her dog as they wait for trains to Poland in Lviv, Ukraine. Reuters

A woman ties ribbons in Ukrainian national flag colours in a girl's hair as people wait at a refugee assistance centre in Prague, Czech Republic. EPA

A Ukrainian soldier carries an elderly woman crossing the Irpin river on the outskirts of Kyiv. AP

Lena, who had never left Ukraine before fleeing into Moldova, feeds Dasha, 3, soon after crossing the border. Erin Clare Brown for The National

Refugees without immediate plans to move further inland can stay the night in tents set up on Moldova's side of the border. Erin Clare Brown for The National

Tatiana and her son wait for a van that will carry them from the Moldovan border to Chisinau. Erin Clare Brown for The National

Each night, the Palanca refugee camp in Moldova feeds up to 300 people who arrive with no onward plans. Erin Clare Brown for The National

People pass a damaged bridge while fleeing the town of Irpin, close to the Ukrainian capital of Kyiv. AP

A Ukrainian soldier stands guard next to a church in Irpin. EPA

A firefighter holds the baby of a Ukrainian refugee at the border in Romania. AP

Ukrainian President Volodymyr Zelenskyy speaks in Kyiv. Reuters

A Ukrainian soldier at a checkpoint in Kyiv. AP

Ukrainian activist Ihor Mazur, left, a veteran of the war in the country's east, looks at a night-vision device in Kyiv. AP

Ambassadors attend a UN Security Council meeting on threats to international security after Russia's invasion of Ukraine, in New York. Reuters

Ukraine's UN ambassador Sergey Kyslytsya holds a paper with an image of Russia's Foreign Minister Sergey Lavrov as he addresses the Security Council in New York. Reuters

A road sign put up in support of Mr Zelenskyy outside Russia's embassy in Washington. AFP

Ukrainian refugees at the train station in Lviv, western Ukraine. EPA

Lethal and non-lethal Ukrainian aid is loaded on to a plane bound for Poland by Canadian soldiers in Trenton, Ontario. Reuters

Volunteers carry medical aid and necessities at a train station in Lviv. EPA

Everton players wear T-shirts in support of Ukraine as they warm up for an English Premier League football match against Tottenham Hotspur. AP

A residential building damaged by Russian shelling in Chernihiv, Ukraine. Reuters

A man walks past a checkpoint in heavy snow in Lviv. Getty

A man fleeing fighting in Irpin waits to cross a river after Russian forces entered the city. Getty

Soldiers assist Irpin residents underneath a damaged bridge as they flee. Getty

Ukrainian civilians who volunteered to join the Territorial Defence Forces take part in a training exercise in Odesa after Russia's invasion. Reuters

Men carry a body to a lorry as people flee from the frontline town of Irpin. EPA

A Ukrainian police officer runs with a child as the sound of shelling echoes nearby in Irpin. AP

Parents and children struggle to board a train in Lviv. AP

Global air cargo markets recorded slower growth in January as supply chain disruptions, capacity constraints and deterioration in economic conditions for the sector dampened demand, Iata said.

Global freight demand, measured in cargo tonne-kilometres, was up 2.7 per cent year-on-year in January, the latest report showed. That was down from the 9.3 per cent growth recorded in December 2021.

Capacity was 11.4 per cent above January 2021 levels. Although in positive territory, capacity remains constrained, 8.9 per cent below January 2019 levels, Iata said.

“Demand growth of 2.7 per cent in January was below expectation, following the 9.3 per cent recorded in December. This likely reflects a shift towards the more normal growth rate of 4.9 per cent expected for this year,” Mr Walsh said.

Middle East airlines recorded a 4.6 per cent annual decrease in cargo volumes in January and a drop of 2.2 per cent in performance compared with the previous month.

This was due to a deterioration in traffic on several key routes such as Middle East-Asia and Middle East-North America, Iata said.

Capacity was up 6.2 per cent compared with January 2021 but remained constrained compared with pre-Covid-19 levels, down 11.8 per cent from the same month in 2019.

Cargo volumes for African airlines, meanwhile, increased 12.4 per cent in January 2022, compared with January 2021. The region was the strongest performer, according to Iata, with capacity at 13 per cent above January 2021 levels.