Growth in demand for freight slows in January, says IATA, but it is too early to predict the extent of the impact of the Russian-Ukrainian conflict

According to the latest data from the International Air Transport Association (IATA), global demand for air transport continued to grow in January, albeit at a slower pace.

Interruptions in supply chains and capacity constraints, as well as deteriorating economic conditions for the sector have weakened demand, according to IATA.

Measured in tonne-kilometers, global demand grew by 2.7 percent compared to January 2021 (3.2 percent for international operations). This is much lower than the 9.3 percent increase seen in December 2021 (11.1 percent for international operations).

Click to enlarge.

Bandwidth was 11.4% higher than in January 2021 (10.8% for international operations), IATA figures showed. “Although this is a positive area compared to the level before Covid-19, capacity remains limited, 8.9 percent below the level of January 2019,” – said in the organization.

IATA noted supply chain disruptions as a result of flight cancellations due to labor shortages, winter weather and, to a lesser extent, 5G deployments in the U.S., as well as zero Covid policies in mainland China and Hong Kong.

CTK levels, actual and seasonally adjusted. Click to enlarge.
CTK’s rise against new global export orders. Click to enlarge.

The Purchasing Managers’ Index (PMI), which tracks global new export orders, fell below 50 in January for the first time since August 2020, according to IATA, showing that most of the companies surveyed reported falling new export orders.

The January World Index of Purchasing Managers (PMI) was 37.8. “Although values ​​below 50 are usually favorable for air travel, in the current environment, this indicates an extension of delivery times due to bottlenecks,” – commented in the organization.

Another factor affecting demand is that the ratio of inventories to sales remains low. IATA believes this is positive for air travel, as it means manufacturers can turn to air travel to quickly meet demand.

ACTK levels, actual and seasonally adjusted. Click to enlarge.

“Demand growth of 2.7 percent in January was lower than expected after the 9.3 percent recorded in December,” said IATA CEO Willy Walsh. “This probably reflects the shift towards more normal growth rates of 4.9 percent expected this year. However, looking ahead, we can expect that the Russian-Ukrainian conflict will affect the freight markets. Shifts in production and economic activity related to sanctions, rising oil prices and geopolitical uncertainty are converging. Power is expected to be under a lot of pressure and rates are likely to rise. However, it is too early to predict how much. “

The Russian-Ukrainian conflict will have a negative impact on air transport, IATA said. “The closure of the airspace will stop the direct connection with many markets related to Russia,” the statement said. “Overall, the impact on world markets is expected to be low, as freight transported to / from / within Russia accounted for only 0.6 percent of global air traffic in 2021. Several specialized carriers are registered in Russia and Ukraine, in particular those engaged in heavy lift operations.

Load utilization factor by registration regions. Click to enlarge.
International Growth CTK (Airline Registration Region). Click to enlarge.

https://www.aviationbusinessnews.com/cargo/latest-news-cargo/cargo-demand-growth-slows-in-january-says-iata-but-too-early-to-predict-extent-of-russia-ukraine-conflict-impact/ Growth in demand for freight slows in January, says IATA, but it is too early to predict the extent of the impact of the Russian-Ukrainian conflict

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