Air Cargo Demand To Hit Record High In 2024
The International Air Transport Association (IATA) says demand in 2024 will be 11.3% higher than in 2023. In November, the organization forecast demand growth of 11.8% in 2024, half a percentage point higher than the actual figure.
The demand growth that air cargo companies will see in 2024 also represents the highest demand level in history, 0.5% higher than the record set in 2021, IATA said. IATA measures demand in freight tonne kilometers (CTK).
Available cargo tonne kilometers (ACTK), which IATA uses to measure capacity, also increased by 7.4% from 2023 as demand continues to grow.
Airlines are also working to improve efficiency while dealing with growing demand. IATA uses a metric called cargo load factor (CLF) to determine how efficiently cargo space is utilized; this is achieved by dividing CTK into ACTK. In 2024, the average CLF will be 45.9%, 1.6 percentage points higher than in 2023.
Yields will average 1.6% lower than in 2023, but Willie Walsh, IATA’s director general, said overall the air cargo industry is expected to grow this year, especially amid global elections, geopolitical conflicts and rising fuel costs.
“Air cargo was the highlight of 2024, with airlines moving more air cargo than ever before. More importantly, it was a year of profitable growth. Demand was up 11.3% year-on-year, driven primarily by e-freight. “Particularly strong” trade restrictions and various shipping restrictions, “combined with airspace restrictions, which have limited capacity on some of the key long-haul routes to Asia, have kept yields at relatively high levels,” Walsh said in the statement. “Extraordinary. While average returns continue to decline from their peak in 2021-22, they are on average 39% higher than in 2019.
December 2024 rounded out the year with global kilogram demand up 6.1% year-on-year, marking the 17th consecutive month of growth in demand. Industry-wide CTKs rose 0.9% month-on-month in December, seasonally adjusted.
Asia-Pacific and North America were the biggest contributors to CTK growth in December. North America’s contribution rose to 23.6%, up more than 17 percentage points from the same period in 2023. While Asia’s contribution fell 4.9 percentage points from 2023, it still accounted for 46.6% of CTKs.
Capacity also increased, with ACTKs up 3.7% compared to December 2023.
Global jet fuel prices also fell, falling 14.9% year-on-year in December and 1.2% month-on-month. This means prices have fallen for the sixth consecutive month, which may be a relief for an industry that is constantly competing with other modes of freight.
IATA said these prices will continue to fall due to increased global oil supplies and economic and energy changes in China. The company continues to increase its use of alternative energy sources such as liquefied natural gas (LNG).
Despite a decline in air cargo volume in 2024, industry revenues grew 6.6% year-on-year in December. But performance fell 0.4% month-on-month.
According to the monthly report released by the International Air Transport Association (IATA), the full-year growth came from a synergy of factors.
“Solid growth was driven by a combination of factors: strong e-commerce demand during the holiday season, limited air freight capacity between Asia and North America or Europe due to airspace restrictions, and continued disruptions to ocean shipping,” the organization wrote, including a de facto blockade in the Red Sea and “Houthi rebel attacks on commercial ships, especially those flying Western flags.”
Turning its sights to 2025, IATA expects demand in the aviation industry to grow modestly by around 5.8%.
Looking ahead, Walsh said the industry knows it will face unexpected challenges, especially in politics.
