October sees slowest growth in cargo demand for African airlines

December 4, 2024 in Business, Companies, Trade & Industry, Transport by Editor

African airlines in October registered a 1.6pc increase in demand for cargo relative to the comparable for 2023, amidst a capacity glut that diluted the load factor. According to the latest market data released by the International Air Transport Association IATA, Africa’s cargo capacity increased 7.7pc while the load factor stood at 40.1pc. That means that 60pc of available freighter capacity operated by African cargo carriers remained unsubscribed during the month.

The region lagged global performance, where demand rose 9.8pc against a 5.9pc growth in capacity over the same period. This was the 15^th consecutive month of growth for the industry.

Capacity growth was supported by an 8.5pc increase in international belly capacity while dedicated freighter capacity also increased by 5.6pc. IATA notes that this was the seventh consecutive month of growth with volumes approaching 2021 peak levels. Global air cargo yields (including surcharges were up 10.6pc on 2023 and 49pc on 2019 levels.

IATA notes that September demand was augmented by a 1.6pc year-on-year rise in industrial production while global goods trade also increased 2.4pc for a sixth consecutive month of growth. The increase in trade was partly the result of cautionary action by businesses who stockpiled inventory against potential disruptions, such as the US port strike.

Also, global manufacturing activity rebounded in October with the Purchasing Managers Index (PMI) for global manufacturing output trending above the 50-mark. However, the PMI for new export orders, remained below the 50-mark, suggesting ongoing uncertainty and weakness in global trade.

Despite the positive trajectory, looking at 2025, IATA urged caution citing risks around US trade policy under a Trump presidency. US headline inflation, based on the annual Consumer Price Index (CPI), rose by 0.17 percentage points to 2.58pcin October, ending a six-month decline. In the same month, the inflation rate in the EU increased by 0.24 percentage points to 2.33pc. China’s consumer inflation fell to 0.29pc in October, sparking concerns of an economic slowdown.

“While 2024 is shaping up to be a banner year for air cargo, we must look to 2025 with some caution. The incoming Trump Administration’s announced intention to impose significant tariffs on its top trading partners—Canada, China and Mexico—has the potential to upend global supply chains and undermine consumer confidence. The air cargo industry’s proven adaptability to rapidly evolving geopolitical and economic situations is likely to be tested as the Trump agenda unfolds,” said Willie Walsh, IATA’s Director General.