As early indicators suggest a potential thaw in global trade, the air cargo market is experiencing its first signs of recovery. Cathay Pacific's latest operational data reveals significant growth in international freight services during May, buoyed by a temporary easing of U.S.-China trade tensions and optimized capacity deployment.
The Hong Kong-based carrier reported an 8.1% year-over-year increase in cargo volume for May, reaching 734 million freight ton kilometers (FTK). Capacity grew in parallel by 8%, while the cargo load factor edged up 0.1 percentage points to 59.4%. In absolute terms, Cathay transported 135,807 tons of goods last month—a 12.2% surge compared to May 2022.
Trade Policy Impacts Market Psychology
The airline's cargo division attributed the growth to improved market sentiment following the suspension of tariff escalations between Washington and Beijing. Businesses appear to be accelerating shipments in anticipation of potential duty reductions, creating a short-term demand spike.
"Our cargo business performed well in May with total tonnage growing 1.8% from April," said Lavinia Lau, Cathay's Chief Customer and Commercial Officer. She noted sustained demand despite China's Golden Week holiday period, particularly for specialized services like the transport of live seafood from Southeast Asia and thoroughbred horses from Australia.
Diverging Trends in Hong Kong's Cargo Market
While Cathay's freight demand has grown 8.7% year-to-date by FTK measurements, Hong Kong International Airport (HKIA) reported more modest growth. The aviation hub handled 422,000 tons of cargo in May—a 1.4% annual increase that fell below its 2.7% average growth for the first five months of 2023.
Transshipment traffic, particularly on Europe and Middle East routes, partially offset weaker primary demand. This divergence suggests that while trade policy improvements benefit certain operators, broader market conditions remain fragile.
Looking ahead, Lau indicated that Cathay expects stable market sentiment in June but will maintain operational flexibility. The mixed signals from Hong Kong's cargo ecosystem underscore the persistent uncertainties in global trade, requiring continued vigilance from air freight providers.