Air cargo demand still high but ‘tangled’ global trade a concern: IATA

Airlines are continuing to benefit from high demand for air cargo and healthy yields, according to industry association IATA, but rising consumer and producer prices could eventually weigh on growth. Outlining another month of strong air cargo performance in September 2021, IATA notes on 3 November that supply-chain congestion around the world is still a largely positive trend for airlines in demand terms, as businesses with low inventory-to-sales ratios seek faster transportation methods. IATA also states that despite already-high air cargo fares trending upwards in recent weeks, they remain historically favourable versus shipping costs. “In September, it was on average three times more expensive to send a kilogram of chargeable weight using air compared to ocean, compared to 12.5 times more prior to the crisis,” IATA states. The biggest constraint on airlines meeting demand is likely to be a lack of capacity – particularly in bellyholds, as parts of the passenger fleet remain grounded, the airline body says. But while airlines enjoy high traffic and record freight load factors, of concern regarding future trends is the “strong increase in prices, both for businesses and consumers” in the wider economy, which could eventually put the brakes on demand, IATA says.<br/>