BIFAlink


Policy & Compliance


www.bifa.org


COVID-19 causes record collapse in air cargo demand, says IATA


Lockdowns and a capacity crunch resulting from the pandemic saw volumes of air cargo carried plummet in the first half of 2020. However volumes did pick up in the second half of the year


IATA has revealed that 2020 was the worst year for air cargo demand since it began recording air cargo trends in 1990. Looking back at air cargo’s performance last


year, the association reported a year-on-year decrease in air cargo demand, measured in cargo tonne km (CTK), of 10.6% — the largest year-on-year drop since its records began. IATA said that, in terms of demand, air cargo


had under-performed in 2020 but volumes would have been higher had extra capacity been available. Industry-wide capacity, measured in available


cargo tonne km (ACTK), declined by 23.3% year on year in 2020. IATA attributed air cargo’s performance in 2020


to global lockdowns in the first few months of the year, which disrupted airfreight supply chains until around May. Since then, IATA said: “This recovery has continued until the year-end,


16


despite some volatility when renewed COVID-19 outbreaks forced some markets to implement new restrictions.” The lack of airfreight capacity last year was


caused by bellyhold capacity being reduced when most passenger services were grounded due to COVID-19 restrictions. Carriers managed to add capacity by ramping up freighter operations and making use of “preighters”, but were “unable to fully compensate the lack of belly capacity”.


Main culprit IATA explained: “This effect is arguably the main culprit for the under-performance of airfreight, and offsets positive factors such as the need to turn to air travel for PPE and vaccine shipments.” This lack of airfreight capacity led to


increased fares, which peaked in April and May, and spiked again in the traditional peak season


towards the end of the year. Also last year, the air cargo load factor climbed


by 7.7 percentage points (ppts) to a record high of 54.5%. Alexandre de Juniac, IATA director general and


chief executive, commented: “Air cargo is surviving the crisis in better shape than the passenger side of the business. For many airlines, 2020 saw air cargo become a vital source of revenues, despite weakened demand. But with much of the passenger fleet grounded, meeting demand without belly capacity continues to be an enormous challenge. And, as countries strengthen travel restrictions in the face of new coronavirus variants, it is difficult to see improvements in passenger demand or the capacity crunch. 2021 will be another tough year.” Looking at regional performance for 2020,


Africa-based airlines experienced the most growth in demand with a year-on-year increase of 1%. Capacity in the region decreased by 17.3%. Europe-based airlines experienced a year-on-


year decline in volumes — of 16%. Capacity declined by 27.1%. IATA explained: “New lockdowns and adverse


economic conditions in the region put this rebound under pressure in the near term.”


March 2021


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20