Global air cargo market demand rose +11% year-on-year for a third consecutive month in March as buoyant e-commerce volumes and concerns over the impact of conflict in the Red Sea region on ocean freight services delivered an unexpected first quarter bonus for forwarders and airlines, according to the latest weekly market data from Xeneta.
In what are typically weaker months of the year for the airfreight industry, these higher volumes outpaced growth in capacity supply in Q1, which increased by +8% YoY. In turn, this produced a jump in the global dynamic load factor, which is Xeneta’s measurement of cargo capacity utilization based on volume and weight of cargo flown alongside capacity available.
Load factor in the opening three months of 2024 rose +2% pts YoY to 59%, and March performance has shown similar growth, edging up to 61%.
“While this latest monthly data should be balanced against the lower base recorded in the corresponding month of 2023, when we saw weakened global manufacturing activities, Q1 2024 has still seen a surprisingly busy airfreight market. The level of demand in the first quarter doesn’t indicate a market which is running out of steam so far,” said Niall van de Wouw, Xeneta’s Chief Airfreight Officer.
“The question is, should we be surprised by it, or should we get used to it? Although the market didn’t benefit immediately, the Red Sea disruption was clearly a factor in these latest figures. Airfreight growth was primarily driven by increased volumes from the Middle East and South Asia as shippers shifted services from ocean to air to avoid Red Sea delays. We also cannot underestimate the importance of e-commerce growth, which shows no sign of abating on its most prominent lanes.”
Subsequently, the average global airfreight spot rate in March increased +7% from the previous month to USD 2.43 per kg.
On the corridor level, as highlighted, the Middle East and South Asia to Europe market continued to lead the growth of air cargo rates in March as the influx of air cargo demand caused by Red Sea concerns squeezed capacity on these lanes. The average spot rate on this corridor jumped +46% over February’s level to USD 2.82 per kg, up +71% year-on-year.
This was especially seen for the India outbound market, where the India to Europe air cargo spot rate in March rose 68% month-on-month to USD 3.38 per kg.
In contrast, the average ocean containerized spot rate on the India West Coast to North Europe lanes experienced a -9% decline in March after its peak in February, although this remained +340% above the level in December, prior to the Red Sea disturbance.
The Middle East and South Asia to US air cargo market followed suit. Its average spot rate of USD 4.03 per kg in March was up +35% month-on-month and +51% year-on-year.
In comparison, the air cargo spot rate from Europe to US increased only marginally by +3% month-on-month to USD 2.12 per kg due to this corridor being less impacted by the Red Sea.
The China outbound market experienced a decline in its spot rate versus February 2024 as the market cooled down after the Lunar New Year. The China to Europe spot rate decreased -3% month-on-month to USD 3.64 per kg. However, it increased +5% over the previous year, boosted primarily by e-commerce demand and the modal shift away from the Red Sea. Similarly, the China to US market spot rate of USD 4.06 per kg slipped down -2% month-on-month, although, year-on-year, growing e-commerce demand and delayed recovery of belly capacity contributed to a noticeable +15% average jump in spot freight rates.
The South America outbound market registered the largest decline among the top global air cargo corridors. As floral market demand eased, the South America to US air cargo spot rate dropped -12% from the previous month to USD 1.25 per kg in March, down -7% on the previous year. The South America to Europe market experienced a similar trend, with spot rates averaging USD 1.75 per kg, a fall of -18% month-on-month and -11% year-on-year.
March data shows freight forwarders continued to purchase a larger share of volumes on the spot market as they kept their options open pending an anticipated cooling down of the Red Sea disruption, and to benefit from the traditionally more imbalanced demand/supply ratio caused by the influx of airline belly capacity at the start of summer schedules. In the first quarter of 2024, the share of volumes in the spot market accounted for 43% of the total market – compared to 31% in the corresponding pre-pandemic era – as expectations of a ‘normalization’ of the cargo market prompted freight forwarders to take short-term risks in the spot market in the hope of longer-term gains.
Similarly, in the first quarter of 2024, more shippers pivoted away from longer-term global air cargo contracts to short-term capacity commitments, with three-month contracts accounting for 41% of all newly negotiated contracts in this quarter, up +18% pts from the previous quarter. The preference for six-month contracts declined 23% pts versus the previous quarter.
“The air cargo market has clearly enjoyed a stronger-than-anticipated start to the year, but there’s a different quarter coming along and more capacity coming in, so we do expect an overall downward pressure on load factor and rates, aside from selected corridors where the continuing rise of e-commerce and the residue of the Red Sea uncertainty will continue to boost rate levels.
“But this is now six months in-a-row that the air cargo market has been stronger than we expected. When is it going to slow down? Only time will tell but, right now, airfreight demand is surprisingly resilient.”
Cathay Cargo has resumed Ho Chi Minh City freighter flights after a four-year suspension due to the pandemic.
A flight carried out on April 4 was the first since December 2019. The weekly flight, CX3148, will operate from Ho Chi Minh City in Vietnam every Thursday, with the freighter first originating from Hong Kong to Hanoi, then routing to Ho Chi Minh City before returning to Hong Kong.
This will supplement Cathay Cargo’s current six freighter flights per week from Hanoi to Hong Kong.
Cathay Pacific has been operating passenger services between Vietnam and Hong Kong since 1949. The very first flight carried a significant amount of cargo, including diplomatic mail as well as seafood and vegetables.
Testament to the significance of the Vietnam market to its global freighter network, Cathay Cargo commenced full freighter services from Ho Chi Minh City and then Hanoi in March 2008.
In 2023, Cathay Cargo shipped an average of almost 2,000 tonnes of cargo from Vietnam every month, of which about 600 tonnes were carried on Cathay Pacific’s twice-daily passenger flights from Ho Chi Minh City.
These comprised mainly garments, footwear, fruits, and live and frozen seafood, headed to key destinations such as Hong Kong, the Chinese Mainland, North East Asia, Australia and North America.
In addition to greater cargo capacity, the resumption of the freighter service will give shippers in Ho Chi Minh City access to Cathay Cargo’s main-deck solutions, namely Cathay Expert for odd-sized shipments, as well as freight designated as Cargo-Aircraft-Only, such as certain dangerous goods.
Regional head of cargo southeast Asia Ashish Kapur said: “We are very excited to welcome our freighter back to Ho Chi Minh City again. With factory activities resuming and air cargo demand picking up, it is timely for us to resume our freighter service from the economic heart of Vietnam.
“Together with our existing twice daily passenger flights serving the city, the addition of our freighter service will give local businesses more choices, especially in terms of our specialised solutions that can be tailored to suit their needs.
“Whether it is the latest fashion wear from the factories, fresh dragon fruit from the farms or live seafood from the ocean, we are committed to partnering with them on their journey to bring the best of Vietnam to Hong Kong and the rest of the world.”
Country manager for Vietnam and Cambodia Nicolas Masse said: “Our dedicated team in Ho Chi Minh City has been eagerly awaiting the resumption of our freighter service. We have been working hard to ensure we are operationally ready on the ground and able to respond quickly to our customers’ needs, whatever they may be. Our team of experts are certainly looking forward to working with our cargo handling agents to deliver the best service to our customers.”
One Air, the British cargo airline, has commenced operations at East Midlands Airport (EMA).
The central UK airport will now be a regular origin and destination point for One Air’s Boeing 747-400 freighter services connecting Asia and Europe as well as for ad hoc global charter services.
“East Midlands Airport has a lot of important plus points which make it attractive for all-cargo operations, including the availability of slots and fewer restrictions around night flying compared to other airports. EMA also has a very understanding and progressive attitude towards freighter operators. As a growing British airline, we look forward to establishing our presence at EMA and supporting our freight forwarding, logistics and charter clients moving goods to and from the UK,” said Chris Hope, One Air’s Chief Operating Officer.
One Air’s first flight into East Midlands arrived from Hong Kong at the weekend with a 105-tonne payload.
EMA boasts one-stop connections to 185 of the world’s largest cities, including New York, Singapore, Dubai, Hong Kong, Tokyo, Paris, and Mumbai, and is home to the UK’s most important express air freight hub. It enables cargo operators and their clients to move goods quickly and efficiently around the globe. The airport handles the equivalent of more than one million packages every night, and its cargo operation provides vital support to regional businesses, including those in the advanced manufacturing, aerospace, pharmaceuticals, and automotive sectors, contributing around £443 million GVA to the regional economy.
EMA’s Commercial Director, Chris Lane, added: “We’re absolutely delighted to welcome One Air to East Midlands Airport. They bolster what is already a highly successful, nationally significant cargo operation which benefits from a strategic central location, fewer restrictions than many other airports, and a team who are totally dedicated to providing a top-class service. We hope this is the start of a long-standing partnership with One Air to help us continue to provide seamless trade that powers the UK.”
Faroe Islands-based carrier FarCargo recently launched its first transatlantic air cargo route for salmon shipments in March.
The planned outbound route is Billund – Faroe Islands – Newark, with a fuel stop in Keflavik (BLL-FAE-KEF-EWR), and inbound Newark – Billund (EWR-BLL).
A subsidiary of salmon farming business Bakkafrost, FarCargo used a Boeing 757-200 converted freighter, which it took delivery of at the end of last year.
The aircraft has a total capacity of 34 tons and 240 cubic meters and includes a cool cabin on the maindeck for perishables and pharmaceuticals.
Initially, the aircraft will carry out two rotations per week, increasing to five times per week later this year.
Swedish airline West Atlantic will operate the aircraft on behalf of FarCargo, until FarCargo is able to obtain an AOC.
Bakkafrost has been exporting salmon to the US for the past several years, and with the new direct route Bakkafrost can offer daily deliveries of salmon to customers in the US, marketed as Superior+ Bakka Salmon.
ECS Group company Nordic GSA will offer the airline’s cargo space from Newark to Billund and to the Faroe Islands.
Meanwhile, fellow ECS Group company Globe Air will market the sector Newark to the European Union.
Billund Airport will be FarCargo’s main hub in Denmark, connecting the eastbound and westbound route.
FarCargo’s operations are a new business perishables opportunity for the Faroe Islands as this is the first cargo aircraft to operate to and from the islands.
“The FarCargo team is eager to start the operation and look forward to an excellent cooperation with NordicGSA and Billund Airport, and hope that the markets in Denmark and Faroe Islands will take advantage of this new opportunity,” said FarCargo chief executive Birgir Nielsen.
“Billund Airport and Cargo Handling Billund Airport are delighted that FarCargo has chosen BLL as their cargo hub in Denmark,” said Jan Hessellund, chief executive of Billund Airport.
“Adding FarCargo to the growing freighter network in Billund Airport represents unique opportunities for our regional cargo community, while at the same time it supports our overall cargo strategy – to increase the share of flown cargo vs. trucked.
“Together with FarCargo and NordicGSA, we will work to make this route an instrumental part of Faroese and North American trade and a commercial airline success.”
Swissport Tanzania has been awarded IATA CEIV Fresh certification for its air cargo logistics operations at Julius Nyerere International Airport in Dar es Salaam (DAR).
The new certification positions Swissport as the only air cargo handler to meet this standard at Julius Nyerere International Airport.
The achievement in Tanzania complements Swissport’s CEIV Fresh and CEIV Pharma certifications in Nairobi, Kenya.
“As the demand for perishable goods from Tanzania to various parts of the world continues to grow, Swissport Tanzania is enhancing its perishables handling capabilities, solidifying its pivotal role in supporting the growth of aviation in Africa,” said Mrisho Yassin, chief executive of Swissport Tanzania. “With the addition of CEIV Fresh in Dar es Salaam, Swissport offers airlines an extended, secure, and certified cool-chain process.”
Currently, 21 of Swissport’s warehouses, including four in Africa, are certified for pharmaceutical logistics by IATA’s CEIV Pharma, the UK’s MHRA or other recognised industry associations.
“Our state-of-the-art perishable handling facilities in Kenya and Tanzania underline Swissport’s commitment to East Africa,” said Dirk Goovaerts, head of continental Europe, Middle East, and Africa, and global cargo chair at Swissport International.
“As we continue to expand our global presence, diversify our service portfolio, and invest in advanced infrastructure and technologies, African markets are a central focus for us. It is our objective to serve passengers airlines and cargo customers and to contribute to the economic development of Africa.”
Julius Nyerere International Airport, located 12 km from Dar es Salaam, is a key hub for Swissport. Since 1985, the company has been providing ramp handling, passenger services and executive aviation services, and managed three modern air cargo centres at the airport.
These warehouses can handle a wide variety of cargo, including general, special and temperature-controlled cargo and offer hub, express and forwarder handling.
Air cargo demand increased by a “remarkable” 18.4% year on year in January – the second month in a row of double-digit percentage increases.
IATA data shows that as well cargo tonne kms (CTK) increasing in January, available capacity was up 14.6% year on year as belly space continued to be added to the market and the cargo load factor improved by 1.4 percentage points to 45.7%.
CTKs for the month were also 2.8% up on pre-Covid 2019 levels.
The airline association said the increase in demand was the highest registered since summer 2021 when the world was in recovery mode following the Covid pandemic.
The increase was attributed to rising e-commerce demand, although last year the Lunar New Year holiday took place in mid-January meaning factories were closed in the second half of the month.
There were also reports of some modal shift because of the Red Sea shipping crisis.
IATA director general Willie Walsh said: “This is a strong start to the year. In particular, the booming e-commerce sector is continuing to help air cargo demand to trend above growth in both trade and production since the last quarter of 2023.
“The counterweight to this good news is uncertainty over how China’s economic slowdown will unfold.”
IATA added that air cargo demand growth outpaced trade and production.
Global cross-border trade increased by 1% in December compared to the previous month but was down 0.2% year on year.
The manufacturing output Purchasing Managers’ Index (PMI) improved to 50.3, surpassing the 50 mark for the first time in eight months, indicating expansion.
The new export orders PMI also saw an increase to 48.8, but remains below the critical 50 threshold, suggesting a “continuing yet decelerating decline in global exports”.
“Inflation in major economies continued to ease from its peak in terms of Consumer Price Index (CPI) in January, reaching 3.1% in both the US and in the EU, and 2.1% in Japan,” IATA added.
“China’s CPI, however, indicated deflation for the fourth consecutive month, raising concerns of an economic slowdown. China’s negative inflation rate of -0.8% was the lowest since the Global Financial Crisis in 2009.”
Looking at regional performance, Asia Pacific airlines saw their air cargo volumes increase by 24.6% year on year in January.
“Carriers in the region benefited from ongoing growth in international CTKs on three major trade lanes: Africa-Asia (+52.5%), Middle East-Asia (+29.5%) and Europe-Asia (+27.5%),” IATA said.
North American carriers registered a 9.3% increase in cargo volumes.
IATA said that carriers in the region benefitted from growth on the North America-Asia trade lane (+17.1%) and North America-Europe trade lane (+3.5%).
European carriers saw their air cargo volumes increase by 16.4% in January led by demand on intra-Europe and Europe-Asia.
Middle Eastern carriers had the strongest performance in January 2024, with a 25.9% year-on-year increase in cargo volumes.
“Carriers in the region benefited from growth in the Middle East–Asia (+29.5%) and Middle East–Europe markets (+46.1%),” IATA said.
Latin American carriers experienced a 13.4% increase in cargo volumes compared to January 2023 and African airlines saw their air cargo volumes increase by 17%.
in January 2024, much improved compared to December’s performance (-1.2%). Carriers in the region benefitted from strong growth on the Africa-Asia trade lane. Capacity in January was 19.4% above January 2023 levels.
Hong Kong Air Cargo is accelerating its European e-commerce business with the launch of a new route between Hong Kong and Liege in Belgium.
The cargo carrier’s new e-commerce route to Europe is served by Airbus A330-200 freighters.
The first flight, RH375, departed from Hong Kong International Airport at 12.20am HKT on February 11 and arrived at Liège Airport at 10.40am local time.
This is the third new European destination for Hong Kong Air Cargo.
Earlier this month, Hong Kong Air Cargo launched an e-commerce route from Hong Kong to London Stansted Airport, also using A330-200Fs.
Plus, in October last year, the freighter operator expanded into Europe for the first time with an e-commerce route operating to Italy.
Adrian Arul, flight operations director at Hong Kong Air Cargo, said: “Our new route to Liège, one of the major air cargo hubs in Europe, will enhance Hong Kong’s economic and trade ties with the continent and offer more choices for air cargo logistics to customers.”
Alexis Lapot, senior cargo manager of Liege Airport, commented: “Being the home of an all-cargo airline like Hong Kong Air Cargo makes us proud and honoured. The choice of Liege Airport demonstrates once further its prominence in the e-commerce industry. The addition of a Hong Kong airline to the roster of carriers operating scheduled flights between the two airports is the cherry on top for us at LGG.“
Hong Kong Air Cargo currently has five A330-200Fs in its fleet.
Kenya Airways Cargo (KQ Cargo) has added a new regular freighter service between Mogadishu in Somalia and Sharjah following the delivery of its first Boeing 737-800 freighter.
The carrier will initially operate the route weekly but hopes to add a second frequency in April. It has partnered with UAE-based cargo sales agent Global GSA Cargo on the service.
The launch of the new flight comes after the carrier added its first 737-800 freighter, which offers an extended range compared with its existing two 737-300Fs.
KQ Cargo has plans to add a second 737-800F in the near future.
KQ Cargo director Dick Murianki said there was a need to invest in new cargo routes to help propel Africa’s prosperity by connecting its people, cultures and markets.
“We believe in having a direct service complemented by Dubai’s trader, transit, humanitarian, and project-driven traffic,” said Murianki.
“The direct route between UAE and Somalia offers huge demand for airfreight transportation, particularly high-tech consumer goods, automotive parts, project cargo, and clothing, which are the most frequently flown goods on the route.
“Kenya Airways’ has the expertise in the region, and our B737-800F’s apt capacity would be the ideal mix over the long term.”
Global GSA Cargo chief executive Kannan Nachiappan said the direct connection between UAE and Somalia offers customers more capacity, cuts transit times and reduces costs.
“UAE, being a multimodal logistics hub, acts as a primary gateway to Africa, and having a dedicated KQ Cargo freighter to offer this service helps cut transit times and offer scheduled maindeck capacity into several remote destinations across the region,” he said.
“This service would cover a market characterised by narrow body belly-only options, lengthy transit times, and expensive rates.”
Thai VietJet Air has signed a master air cargo GSSA agreement with ECS Group for its Asia operations.
ECS Group subsidiary AVS GSA Thailand will handle the contract responsibilities, supported by the overall ECS Asia network.
The agreement, signed in February, allows low cost airline Thai VietJet Air to utilise ECS Group’s in-house digital tools and knowledge to promote its cargo business effectively.
Thai VietJet Air currently operates a fleet of 18 Airbus A320-200 and A321-200 aircraft, focusing primarily on transporting general cargo and perishables.
The airline now aims to further increase its cargo revenue and export volumes across Thailand and various Asian countries, including Singapore, Malaysia, Indonesia, China, Taiwan, Korea, Japan, and Vietnam.
“Thai VietJet Air has carved a solid cargo market share for itself on the Thai domestic market, and offers an impressive international network across Asia – and all that without a freighter in its fleet,” said Monchai Jirakiertivadhana, AVS GSA chief executive Indochina region.
“AVS GSA therefore has an excellent base on which to further develop the airline’s cargo activities and improve its revenue performance.
“We are very proud to have signed a Master GSA agreement with a company that demonstrates the same innovation and business acumen as ECS Group does,” added Adrien Thominet, executive chairman of ECS Group.
“ECS Group will provide the best sales support as well access to all our abilities. We warmly welcome our new partner.”
Airbus Beluga Transport (AiBT) has secured its air operator certificate (AOC) and is now able to operate as an airline using BelugaST freighters.
Airframer Airbus first launched outsized air-cargo service AiBT, operated by Airbus Transport International (ATI), in January 2022.
The BelugaSTs, which until 2021 were used to carry aircraft parts for Airbus, have now been officially transferred from ATI’s fleet register to AiBT’s.
Currently, the fleet includes three BelugaSTs, with the fourth one due for induction this year.
Transitioning to an airline has been a complex process, said Benoît Lemonnier, managing director of AiBT. The company initially hoped to gain its AOC in October last year.
“For our final dossier we had been compiling many documents during the first half of this year, encompassing Flight Safety, Flight Operations, Ground Operations, Technical Operations and Crew Training,” he explained, adding that the documents were submitted at the end of June 2023.
AiBT passed its audit by various authorities on September 26, then its “Continuous Airworthiness and Maintenance Organization” certificate (CAMO) was awarded at the beginning of November.
As well as focusing on paperwork, the company has been busy developing its facilities.
“We of course developed our facilities which included the new main office headquarters, close to Blagnac airport,” said Lemonnier.
“We also secured our aircraft operational base at Francazal airport near to Toulouse, with two dedicated parking spots.
“From there our ground crews have been developing the capacity and capabilities to prepare the Beluga and its missions, especially in terms of loading and unloading the transport pallets as well as managing and maintaining the aircraft.”
AiBT commenced short flights on the existing Airbus network in November, to destinations including Saint Nazaire, Hamburg, Bremen and Seville.
“This approach allows AiBT to test its internal procedures and to train everyone, especially the new pilots, before it resumes its core business of long-haul missions,” said Lemonnier.
AiBT is also focusing on expanding the scope of certified payloads that will be required for the transportation needs of external customers.
“So far we’ve delivered payloads mainly for Airbus Helicopters and Airbus Defence and Space in 2022/2023 and we’re going to expand our customer base in 2024,” predicted Lemonnier.
To accelerate this process, AiBT has forged an agreement with Airbus on further investment to certify the BelugaST to carry more types of helicopters, containers and aircraft engines. Having these certifications will open a significant market, which is what AiBT ultimately targets.
“Later in 2024 we also plan to ramp-up with what we call ‘external flights’, usually long-haul missions,” said Lemonnier. “We want to achieve three missions per month of that kind in 2024 – on top of the existing missions with the BelugaST throughout Europe in support of ATI’s service for Airbus’ production system.”
Olivier Schneider, who joined AiBT in May as head of flight operations, said that the new airline has been preparing for regular operations.
He said: “Our goal is to eventually operate the five Belugas at the same time around the world, which will be a challenge in terms of resources, anticipation and coordination.”
Airbus is replacing its BelugaST fleet with six new-generation BelugaXLs to support the ramp-up of its airliner production.
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