Demand

Global air cargo demand increased +14% versus low levels last year, with ASPA and MEA leading the volume growth. Sustained e-commerce expansion, global maritime shipping disruptions, and rising demand for high-tech, perishables, and consumer goods continue boosting air cargo volumes. 

Capacity

Global air cargo capacity was up +9% YoY in May, propelled by widebody belly cargo, which showed double-digit growth in Northeast Asia. • Overall global capacity remains steady, with persistent constraints across critical routes, like Asia to the US and EU. 

Carriers

Delta Air Lines and United Airlines resume flights to Tel Aviv, while American Airlines is not expected to restore services until Oct '24. • Hong Kong Air Cargo expanded its network by introducing new routes to Europe and Saudi Arabia and increasing its fleet with new freighters for North and South America. • Etihad added 100 additional passenger flights as part of its summer schedule, including 23 weekly flights to new destinations and 77 to existing routes. 

Jet Fuel

Jet Fuel's spot price averaged $100/bbl. In May, it went down 9% from April. • Brent crude oil spot price averaged $82 per barrel (b) in May. OPEC+ will extend production cuts until Q4’24 to stabilize the oil market.

Rates

Global airfreight rates continue to rise in May, fueled by strong e-commerce demand and worsening ocean freight disruptions. Rates are exceptionally high on routes from Asian and Middle East origins to Europe. 

Regulation News

US customs will crack down on e-commerce shipments, potentially causing congestion and heightened market tension with paused flights and charters. Some e-commerce giants were recently designated by the EU as very large online platforms (VLOPs), imposing stricter compliance regulations. Russia/Ukraine: Sanctions are likely to remain active in the foreseeable future.

Regional Market Outlook 

• Airfreight State of the Industry | Bonn | June 2024 8 Europe Asia.
  
  
• Economic growth expectation in the Eurozone slightly improved vs last month with market sentiments improving in some countries. 
  
  
• E-commerce demand and the Red Sea situation lead to significantly higher import rates ex ASPA / MEA to Europe. 
  
  
• Outbound EURO rates have been stable since the onset of 2024 and remain competitive compared to 2023. • Rising air cargo demand fueled by sea freight delays and disruptions, prompting a shift towards increased use of air freight. There is a notable increase in Southeast Asia and India volumes, alongside steady levels of e-commerce air cargo from South China. 
  
  
• Capacity remains constrained from Asia to the US and EU, with advance booking required to manage quarter-end demand surges. 
  
  
• Spot rates from Asia to Europe are increasing, while rates from Asia to the US remain high. 
  
  
• Air cargo volumes from the Middle East to EU remain high due to cascading effects on container shipping caused by the Middle East conflict. 
  
  
• Flights to/from Saudi Arabia remain passenger-centric, limiting space for cargo shipments. This is expected to continue until the first week of July. 
  
  
• Growing number of shippers are opting for a multimodal route via Dubai, causing a capacity shortage. 
  
  
• CA inbound e-commerce demand remains strong, with demand from China growing by more than 20% YoY. 
  
  
• US export demand continues to remain soft despite a yearly rate increase. Inbound demand from AP has grown; into the US experiences high demand, tight capacity, and a steep rise in rates. 
  
  
• SSA market is experiencing low volumes and weak demand, leading to a more competitive market.