The group’s latest figures show that air cargo demand in cargo tonne km (CTK) terms in November increased by 3.7% compared with 2019 levels (used to mitigate the impact of Covid).

IATA said that this growth percentage was “significantly lower” than the 8.2% registered in October and the 6.7% increase over the first 11 months of the year.

“Supply chain disruptions and capacity constraints impacted demand, despite economic conditions remaining favorable for the sector,” the association said.

IATA highlighted labour shortages due to employees being in quarantine, insufficient storage space at some airports and processing backlogs exacerbated by the year-end rush.

Meanwhile, demand indicators remain positive, with retail sales in the US and China strong, trade and industrial production figures continuing to beat 2019 levels and inventory levels low.

IATA added that a surge in Covid cases was driving PPE demand.

Cargo load factors for the month stood at 55.9% – a 6.1 percentage point increase on 2019 – as capacity was down by 7.6% on two years earlier.

IATA director general Willie Walsh said: “Air cargo growth was halved in November compared to October because of supply chain disruptions.

“All economic indicators pointed towards continued strong demand, but the pressures of labour shortages and constraints across the logistics system unexpectedly resulted in lost growth opportunities.

“Manufacturers, for example, were unable to get vital goods to where they were needed, including PPE.

“Governments must act quickly to relieve pressure on global supply chains before it permanently dents the shape of the economic recovery from Covid-19.”

IATA is calling on governments to: ensure that air crew operations are not hindered by Covid-19 restrictions designed for air travellers; implement the commitments governments made at the ICAO High Level Conference on Covid-19 to restore international connectivity; and provide innovative policy incentives to address labour shortages where they exist.

Looking at regional performance, Asia Pacific airlines saw cargo increase by 1.1% in November compared with two years earlier.

North American carriers’ demand was up 13.3%, although this was down on 20.3% in October, as congestion at hubs affected growth.

European carriers registered a 0.3% increase in demand due to supply chain congestion and localised capacity constraints.

Middle East-based airlines saw cargo demand increase by 3.4%, although this was also a “significant drop” on previous months performance.

In Latin America, carriers saw demand drop by 12.8% on 2019, also a deterioration compared with October. Finally, African airlines noted a 0.1% decline, another drop on October.

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The airline association said that in October cargo tonne kms increased by 9.4% compared with 2019 levels, but added that capacity could be affected by any government restrictions on travel in response to the new variant.

IATA director general Willie Walsh said: “October data reflected an overall positive outlook for air cargo. Supply chain congestion continued to push manufacturers towards the speed of air cargo.

“And capacity constraints were slowly resolving as more passenger travel meant more belly capacity for air cargo.

“The impact of government reactions to the Omicron variant is a concern. If it dampens travel demand, capacity issues will become more acute.

“After almost two years of Covid-19, governments have the experience and tools to make better data-driven decisions than the mostly knee-jerk reactions to restrict travel that we have seen to date.

“Restrictions will not stop the spread of Omicron. Along with urgently reversing these policy mistakes, the focus of governments should be squarely on ensuring the integrity of supply chains and increasing the distribution of vaccines.”

Countries around the world have introduced restrictions on travel from southern Africa as a result of the emergence of the new variant.

However, CLIVE Data Services managing director Niall van de Wouw said that so far this has not had a major impact on capacity as airlines had been flying passenger aircraft on cargo-only operations anyway.

Supply chain disruption continues to drive demand

IATA said that demand growth during October was in part fueled by ongoing supply chain disruption.

“Supply chain disruptions and the resulting delivery delays have led to long supplier delivery times,” the association said. “This typically results in manufacturers using air transport, which is quicker, to recover time lost during the production process.”

Cargo load factors for the month stood at 56.1%, which is a 8.5 percentage point increase compared with 2019 levels.

Looking at regional performance, Asia Pacific airlines saw cargo traffic in October increase by 3.6% on 2019.

“The improvement was partly driven by increased capacity on Europe-Asia routes as several important passenger routes reopened,” IATA said.

North American carriers saw cargo demand grow by 18.6% on two years ago with demand for faster shipping times and strong US retail sales are underpinning the North American performance.

European carriers noted a 9% increase in October as “manufacturing activity, orders and long supplier delivery times remain favorable to air cargo demand”.

Middle Eastern carriers registered a 9.4% increase, although this was a drop compared with the previous month due to a deterioration in traffic on several key routes such as Middle East-Asia, and Middle East-North America.

Latin America carriers reported a decline of 5.8% as capacity continued to come under pressure and African carriers continued their strong performance with a 25.9% increase.

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Source: www.aircargonews.net

Image: www.pexels.lv

The post IATA warns knee-jerk Omicron reaction could hit cargo capacity appeared first on Cargo News Today.