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African airlines gain despite global slump in demand

African region recorded a marginal increase in air cargo demand for 2020, despite a global decline due to the effects of the coronavirus pandemic.

The International Air Transport Association (IATA) data for global airfreight markets showed that global demand for air cargo decreased by 10.6 per cent in 2020 compared to 2019. This was the largest drop in year-on-year (YoY) demand since IATA started to monitor cargo performance in 1990, outpacing the six per cent fall in global trade in goods.

However, African airlines saw demand grow by 1.0 per cent in 2020 compared to 2019 (1.9 per cent for international operations) and a fall in capacity of 17.3 per cent (-15.8 per cent for international operations).

African airlines posted the strongest international growth of all regions in 2020 as well as in December. International demand in the month grew by 6.3 per cent YoY. African airlines now have the same share of the global international cargo market as carriers from Latin America (2.4 per cent). International capacity decreased by 21.6 per cent in December, a steepening of the 18.6 per cent fall in November.

Due to lack of available capacity worldwide, cargo load factors rose 7.7 per cent in 2020. This contributed to increased yields and revenues, providing support to airlines and some long-haul passenger services in the face of collapsed passenger revenues.

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Improvements towards year-end were demonstrated in December when global demand was 0.5 per cent below previous-year levels (-2.3 per cent for international operations). Global capacity was 17.7 per cent below previous-year levels ( 20.6 per cent for international operations).

That is much deeper than the contraction in demand, indicating the continuing and severe capacity crunch. With the stalling of the recovery in passenger markets, there is no end in sight for the capacity crunch.

Economic conditions are picking up in 2021. The new export orders component of the manufacturing Purchasing Managers’ Index (PMI) is in growth territory in both developed and emerging markets. And global industrial production has also recovered.

IATA’s Director General and CEO, Alexandre de Juniac, said air cargo was 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,” de Juniac said.

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Strong variations were evident in the regional performance of air cargo in 2020. North American and African carriers reported an annual gain in demand in 2020 (+1.1 per cent and +1.0 per cent, respectively), while all other regions remained in negative territory compared to 2019. International demand fell in all regions except Africa, which posted a 1.9 per cent increase in 2020 compared to the previous year.

Asia-Pacific airlines reported a decline in demand of 15.2 per cent in 2020 compared to 2019 (-13.2 per cent for international operations) and a fall in the capacity of 27.4 per cent (-26.2 per cent for international operations). In December airlines in the region posted a 3.9 per cent decrease in international demand compared to the previous year. After a pause in recovery in Q3, demand is improving, driven by a rebound in manufacturing activity and export orders from China and South Korea. International capacity remained constrained in December, down 25.1 per cent.

Guardian

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