Global Air Cargo Traffic Rises in April, but 2025 Forecast is Downgraded
1. Supply and Demand Trends
Traffic Performance in April 2025
According to the International Air Transport Association (IATA), global air cargo traffic, measured in cargo tonne-kilometres (CTKs), increased by 5.8% year-on-year in April and 2.3% month-on-month in seasonally adjusted figures. This brought total volumes to an estimated 23 billion CTKs. International routes exhibited stronger growth, with a 6.5% year-on-year increase.
April’s growth was likely bolstered by pre-emptive shipments ahead of additional tariffs in the ongoing trade war, particularly the anticipated elimination of the de minimis rule, which had previously exempted packages valued under $800 from U.S. import duties. Additional support came from seasonal restocking of fashion and consumer goods in preparation for summer sales cycles.
Key Route Performance
Europe–Asia: +11.3% year-on-year
Middle East–Asia: +6.7% year-on-year
Asia–United States: +1.9% year-on-year, but down 5 percentage points from March.
Asia–Africa: Notable rebound following six months of decline.
Transatlantic routes: Stable month-on-month.
Year-to-Date Performance through April 2025
Despite a challenging start to the year, March and April’s rebound allowed the air cargo sector to achieve year-on-year growth in traffic. However, capacity has grown at a faster pace than volumes, impacting overall industry dynamics.
Capacity Expansion
Global air cargo capacity expanded by 6.3% year-on-year in April, reaching a record 52.4 billion CTKs. Capacity on international routes increased by 6.9% year-on-year, with all-cargo aircraft showing the fastest growth at 7.1%.
Passenger aircraft belly hold capacity accounted for 54.6% of total capacity, also up 6.9% year-on-year. Airlines have significantly increased capacity to meet heightened demand driven by tariff-related urgency.
2. Price Trends
Fuel Price Decline and Impact on Rates
Kerosene prices fell by 21.2% year-on-year and 4.1% month-on-month, marking the third consecutive monthly decrease. While lower fuel costs contributed to softening air freight rates, the decline was moderate due to strong demand.
Unit Revenue: Up 1.7% year-on-year and month-on-month, driven by sustained demand growth.
Air Freight Rates: Remained relatively stable, as reflected in the Upply Freight Index.
3. 2025 Outlook
Economic Environment
The air cargo sector benefitted from a favorable economic environment in spring. Global manufacturing output, as measured by the PMI (Purchasing Managers' Index), continued its upward trend, stabilizing at 50.5 in April. This marked the fourth consecutive month of growth, though year-on-year comparisons showed a 1.7% decline in PMI, signaling a slowdown.
Export orders fell sharply, dropping 2.8 points to 47.2, reflecting the direct impact of changes in U.S. trade policy.
Revised Industry Projections
IATA has downgraded its 2025 outlook for the air cargo industry:
Revenue: Forecast to decline by 4.7% year-on-year to $142 billion, down from the previously projected $157 billion (+5.7%).
Volume Growth: Expected to rise by only 0.7%, significantly lower than the earlier forecast of 6%.
Unit Revenue: Anticipated to decline by 5.2%, following a 3.7% decrease in 2024.
The revised projections reflect the impact of slower GDP growth, driven by protectionist measures, particularly tariffs. Additionally, greater-than-expected drops in oil prices contributed to declining revenue.
Conclusion
While freight rates remain above pre-pandemic levels, the escalating trade war and economic uncertainties pose significant challenges for the air cargo industry. Despite the headwinds, airlines retain some flexibility, but the broader outlook for 2025 remains cautious.
Source: https://market-insights.upply.com/en/air-freight-a-significant-but-temporary-rebound
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