AIR FREIGHT

M A R K E T U P D AT E
JUNE 2022
Contents
01 MARKET OVERVIEW

02 FOCUS

03 JET FUEL MONITOR

04 GLOBAL DEMAND & CAPACITY

05 TRADE ROUTE ANALYSIS

 MARKET OVERVIEW
Loss of momentum suggests further weakness ahead. Worries have been growing about inflation,
exacerbated by the rising cost of energy. Buffeted by strong headwinds from the repercussions of war in
Ukraine and diminished export activity out of Asia, air cargo traffic lost further momentum in March and is
facing more downward pressure ahead, as key economic indicators in most major markets have weakened.
Coupled with economic indicators, these developments point to cargo traffic in recent months, these developments point to
weakness in global trade going forward. Manufacturing in Asia continued decline in international goods trade, IATA warned.
has been affected by labour shortages and lockdowns due to
Worries have been growing about inflation, exacerbated by
Omicron outbreaks. China’s industrial output sank 2.9% year on
the rising cost of energy. Platts Aviation Fuel Index has been
year in April, while retail sales slumped 11.1%.
above the 400 mark since 25 March, rising as high as 481.9 in
The nation’s export growth, measured in US dollars, slowed to early May before sinking to just above 400 by 20 May.
3.9%, down from 14.7% in March. Imports were flat in April and
US importers and logistics providers are nervously awaiting the
March.
return of Chinese traffic flows as lockdowns in Shanghai ended.
According to IATA, the Chinese economy will likely grow between Some voices have warned of a tidal wave of cargo hitting US
4% and 4.5% this year, down from almost 8% in 2021. Other ocean gateways and clogging up rail infrastructure in the
global powerhouses are also struggling. German industrial output interior, while others predict a slower ramp-up of Chinese
dropped 3.9% from February to March. Export orders were down in exports.
the first quarter in Germany, Japan and Korea. In the US the
The National Retail Federation expects a spike in imports as US
manufacturing PMI slipped 1.7 percentage points in April to 55.4,
retailers rush to bolster inventories before inflation drives prices
its lowest reading since July 2020, and the new orders index lost
higher. It projects imports to climb 5.1% over last year in the first
0.3%.
half of this year, double its forecast from April.
The new export orders component of the global PMI sank to a
Bottlenecks in the intermodal supply chain could force shippers to
reading of 48.2 in March, its lowest level since July 2020.
divert traffic to air cargo.
Coming on the heels of slowing growth in global trade and air

Source: IATA, Seabury, Drewry AIR MARKET UPDATE JUNE 2022 3

 FUTURE SCHEDULES INDICATE CONTINUED RECOVERY OF TRANSATLANTIC BELLY CARGO CAPACITY IN
JUNE

Widebody belly Transatlantic air cargo capacity by airport pair category, 2019-2022
Thousand tonnes per month

Source: Seabury AIR MARKET UPDATE JUNE 2022 4

 FOCUS
JET FUEL PRICE MONITOR
ON 10th of June 2022

Source: IATA AIR MARKET UPDATE JUNE 2022 5

Industry-wide cargo tonne-kilometers
(demand) were down 11.2% in April year-on-
year (YoY). This is a deepening of the March
decline, 4.8% YoY, signaling a continuation of
supply chain and capacity issues that are
G LOBAL DEMAND & CAPACITY
GLOBAL DEMAND, CAPACITY, INTERNATIONAL DEMAND BY
impacting air cargo operations.
LOAD FACTOR ROUTE (SEGMENT-BASED)
Seasonally adjusted (SA) March air cargo
volumes fell further in April, dropping 2.7%
compared with March (MoM). This is the
second consecutive fall in air cargo volumes.
GLOBAL AIR DEMAND & CAPACITY
While the MoM volumes can show significant 20%
volatility, the challenges already mentioned 10%
corroborate the negative development we saw
0%
in April. The war in Ukraine led to a fall in the
-10%
capacity used to serve Europe, as several
airlines based in Ukraine and Russia were -20%
crucial carriers in the region. -30%
-40%
International available cargo tonne-kilometers -50%
(capacity) were up 1.2% compared with March

Jun-20

Feb 21

Feb 22
Aug 19

Dec 20

Aug 21

Dec 21
Dec-19
Feb-20
Oct 19

Aug-20
Oct 20

Apr 21

Oct 21

Apr 22
Apr-20
Jun 19

Jun 21
a year ago. That is, however, down from an
11.2% YoY increase in February, and
seasonally adjusted air cargo capacity
contracted by 3.8%. Asia and Europe are the Demand Capacity FLF(%)
regions seeing the greatest falls in cargo
capacity offered, due to the events already
discussed, and the likelihood that they will International CTK = volume flown outside airline’s region of registration.
linger for some time. For demand, capacity and LF, all % changes in 2021 are compared with pre-crisis 2019 months
FLF = CLF = Freight/ Cargo Load Factor

Source: IATA, Drewry AIR MARKET UPDATE JUNE 2022 6

 CLICK TO GO TO EACH TRADE LANE

EUROPE ASIA
NORTH MESA PACIFIC
AMERICA

LATIN
AMERICA
AFRICA

AIR MARKET UPDATE MAY 2022 7

 TRADE LANE ANALYSIS | AFRICA
DEMAND, CAPACITY,
LOAD FACTOR
For African airlines, international CTKs
dropped by 6% YoY, below the 16% gain 40%
recorded in March.
30%
Capacity was regaining a bit of momentum in

% year-on-year
April. 20%
For the passenger market in March, the 10%
negative impact of Omicron on air travel was
broad-based across all regions. African 0%
airlines reported a 58.6% RPK decline in
march after a 57.9% fall in December -10%
2021(both vs. the same month in 2019)
-20%
As of March 2022, African airlines are
scheduled to receive 29% more aircraft -30%
deliveries in 2022 compared with 2021.

Demand Capacity CLF(%)

For demand, capacity and LF, all % changes in 2021 are compared with pre-crisis 2019 months
FLF = CLF = Freight/ Cargo Load Factor

Source: IATA, Drewry AIR MARKET UPDATE JUNE 2022 8

 TRADE LANE ANALYSIS | ASIA PACIFIC
Airlines in Europe and Asia Pacific have been DEMAND, CAPACITY,
RATE EVOLUTION
most impacted by the war in Ukraine, labor LOAD FACTOR
shortages, and lower trade and manufacturing
activity in Asia due to Omicron. 30% $25.00
The results for Asia Pacific, Europe and
20%
Middle East were all notable declines in April $20.00
compared with a year ago, 12.1%,14.4% and

% year-on-year
10%

Rate / KG
11.8%, respectively. $15.00
0%
For the passenger market, Asia Pacific airlines
$10.00
reported a 67.4% RPK decline in January after -10%
a 65.6% fall in December (both vs. the same
$5.00
month in 2019). India’s domestic market was -20%
hit the most significantly among key domestic
$0.00
markets by an escalation of the pandemic, -30%

Jan-22
Sept 21

Mar-22
Nov 21
Dec 21
Apr 21
May 21

July 21
Aug 21

Feb-22
Oct 21
June 21

Apr-22
with RPK fall versus 2019 accelerating to -
49% in January, after -14.6% in December. -40%
As of March 2022, Asia Pacific airlines are Hong Kong - New York Shanghai - Chicago
scheduled to receive 36% more aircraft Hong Kong - Frankfurt Shanghai - Amsterdam
deliveries in 2022 compared with 2021. Hong Kong - Sao Paulo
Demand Capacity CLF(%)

For demand, capacity and LF, all % changes in 2021 are compared with pre-crisis 2019 months
FLF = CLF = Freight/ Cargo Load Factor

Source: IATA, Drewry AIR MARKET UPDATE JUNE 2022 9

 TRADE LANE ANALYSIS | EUROPE
Airlines in Europe and Asia Pacific have been
most impacted by the war in Ukraine, labor
shortages, and lower trade and manufacturing DEMAND, CAPACITY,
activity in Asia due to Omicron.
RATE EVOLUTION
LOAD FACTOR
The results for Asia Pacific, Europe and
Middle East were all notable declines in April 25% $6.00
compared with a year ago, 12.1%,14.4% and 20%
15% $5.00
11.8%, respectively.

% year-on-year
10% $4.00

Rate / KG
Within Europe, air CTKs have fallen the most
(19.7% MoM) with Ukrainian and Russian 5%
airline capacity currently essentially offline. 0% $3.00
-5%
For the passenger market, European airlines $2.00
-10%
reported a 42.5% RPK decline in January after
a 38.2% fall in December (both vs. the same -15% $1.00
month in 2019). The air travel outlook for -20%
Russia is pessimistic. Economic sanctions and -25% $0.00

Mar 21

Jan-22
Sept 21

Mar-22
July 21
Aug 21

Nov 21
Dec 21

Feb-22
Apr 21
May 21

Oct 21
June 21
flight disruptions linked to the conflict in -30%
Ukraine will impact capacity and passengers’
willingness to travel.
As of March 2022, European airlines are Frankfurt - Hong Kong London - Singapore
scheduled to receive 36% more aircraft Demand Capacity CLF(%) London - New York London - Los Angeles
deliveries in 2022 versus 2021.

For demand, capacity and LF, all % changes in 2021 are compared with pre-crisis 2019 months
FLF = CLF = Freight/ Cargo Load Factor

Source: IATA, Drewry AIR MARKET UPDATE JUNE 2022 10

 TRADE LANE ANALYSIS | LATIN AMERICA
Latin America stands out as some other
regions struggle with capacity Overall,
DEMAND, CAPACITY,
international CTKs fell by 10.6% YoY in April.
CTKs were down in April compared with a LOAD FACTOR
year ago in all regions except for Latin
America, where a strong recovery in air cargo 80%
volumes continues. This is true of the
seasonally adjusted monthly volumes too –
60%
Latin American carriers’ CTKs expanded 2.5%

% year-on-year
40%
MoM. Airlines in this region have shown
optimism about air cargo by introducing new 20%
services and capacity, and indeed in some
cases investing in additional aircraft for air 0%
cargo in the coming months.
-20%
As of March 2022, Latin American airlines are
scheduled to receive 18% more aircraft
-40%
deliveries in 2022 compared with 2021.
For the passenger market for Latin American -60%
carriers, the RPK contraction compared with
2019 accelerated from 22.8% to 26.2%
between December and January.
Demand Capacity CLF(%)

For demand, capacity and LF, all % changes in 2021 are compared with pre-crisis 2019 months
FLF = CLF = Freight/ Cargo Load Factor

Source: IATA, Drewry AIR MARKET UPDATE JUNE 2022 11

 TRADE LANE ANALYSIS | MESA
The markets carrying cargo through Middle
Eastern hubs, reoriented there from Europe- DEMAND, CAPACITY,
Asia to avoid Russian airspace, have held up RATE EVOLUTION
LOAD FACTOR
but failed to show any meaningful increase –
likely dampened by subdued demand overall. 20% $18.00
Within Europe, air CTKs have fallen the most
from February to March 2022 (24.6% MoM) 15% $16.00
with Ukrainian and Russian airline capacity $14.00

% year-on-year
currently essentially offline. A 4.9% MoM 10% $12.00

Rate / KG
increase was recorded in April.
5% $10.00
The results for Asia Pacific, Europe and
$8.00
Middle East were all notable declines in April 0%
compared with a year ago, 12.1%,14.4% and $6.00
11.8%, respectively. -5% $4.00
For the passenger market, for Middle Eastern -10% $2.00
carriers, the RPK contraction compared with $0.00
2019 accelerated from 49.9% to 53.9% -15%

Mar-22
May 21

Apr-22
July 21
Aug 21
Sept 21

Nov 21
Dec 21
Apr 21

June 21

Feb-22
Oct 21

Jan-22
between December and January.
Middle Eastern carriers are expected to obtain
47% more deliveries in 2022 compared with Singapore - Los Angeles
2021. Demand Capacity CLF(%) Singapore - London

For demand, capacity and LF, all % changes in 2021 are compared with pre-crisis 2019 months
FLF = CLF = Freight/ Cargo Load Factor

Source: IATA, Drewry AIR MARKET UPDATE JUNE 2022 12

International CTKs of airlines registered in
North America were down 7.7% in April
compared with a year ago. Seasonally
adjusted volumes expanded by 2% MoM in TRADE LANE ANALYSIS | NORTH AMERICA
April, sustaining a slight, overall positive trend
so far in 2022.
The Asia-North America market is weighing DEMAND, CAPACITY,
RATE EVOLUTION
down the performance we are seeing for this LOAD FACTOR
region overall, but other key routes, such as
Europe – North America, are bucking this 30%
$10.00
trend and showing that cargo demand is still
25%
strong concerning certain routes. Several
carriers in the region are set to receive 20% $8.00

% year-on-year

Rate / KG
delivery of freighters in 2022, adding capacity 15%
to meet pent-up demand. This could lead $6.00
improved CTK volumes for this region in the 10%
months ahead. $4.00
5%
The negative impact of Omicron on air travel 0% $2.00
was broad-based across all regions. North
American airlines reported a 29.5% RPK -5%
$0.00
decline in January after a 22.4% fall in -10%
December (both vs. the same month in 2019).
-15%
The traffic in the US was also disrupted by a
complicated 5G rollout and by heavy
Chicago - Dubai New York - Amsterdam
snowstorms that led to additional flight
cancellations and power outages at airports. Los Angeles - Frankfurt New York - Tokyo
Los Angeles - Shanghai Chicago - Johannesburg
As of March 2022, North American carriers are Demand Capacity CLF(%)
expected to obtain 62% more aircraft
deliveries in 2022 compared to 2022. For demand, capacity and LF, all % changes in 2021 are compared with pre-crisis 2019 months
FLF = CLF = Freight/ Cargo Load Factor

Source: IATA, Drewry AIR MARKET UPDATE JUNE 2022 13