When the barometer of global trade begins to swing dramatically, the air cargo market is often the first to detect the changing winds. In June, the international air freight market in the Asia-Pacific region keenly sensed this upward demand trend and responded swiftly with price adjustments.
Latest data from the Association of Asia Pacific Airlines (AAPA) reveals that international air cargo demand in the region, measured in freight tonne kilometers (FTK), surged by 5.6% year-on-year in June. This growth wasn't accidental but rather the result of multiple converging factors. First, the recovery of global manufacturing, particularly in consumer goods and intermediate products, directly boosted demand for air freight. Second, amid potential U.S. tariff increases and other global trade uncertainties, many companies chose to ship goods early to mitigate risks, further driving up cargo volumes.
Key Drivers Behind the Growth
The expansion in air cargo demand manifested in several key areas: First, the robust development of e-commerce has deepened consumer reliance on cross-border shopping, creating higher demands for air freight's timeliness. Second, time-sensitive shipments like pharmaceuticals and high-tech products continue to show strong demand, with air transport being the preferred option due to its speed and security advantages. Third, some businesses increased inventory levels to hedge against supply chain disruptions, indirectly boosting air cargo volumes.
However, it's noteworthy that capacity growth slightly outpaced demand. Data shows Asia-Pacific carriers expanded capacity by 7.1% in June, leading to a 0.8 percentage point dip in the average load factor to 62.1%. Despite this, AAPA Director General Subhas Menon described current demand as "relatively resilient," emphasizing that air cargo services continue to see strong demand in e-commerce and time-sensitive sectors.
Passenger Market Recovery
Simultaneously, the passenger market showed strong recovery signs. Asia-Pacific airlines carried 31.2 million international passengers in June, up 7.1% year-on-year. For the first half of the year, passenger traffic grew 12%, with international travelers totaling 190.5 million. These figures indicate that as pandemic effects fade, travel demand is rebounding rapidly.
Challenges Ahead
Looking forward, while the air transport market shows overall improvement, significant challenges remain. Menon warned that declining business confidence reflects growing concerns about global economic prospects, which could negatively impact future air travel and cargo markets. He noted that Asia-Pacific carriers remain vigilant about cost pressures while actively adapting to market changes and seeking new growth opportunities regionally and globally.
This means airlines must enhance operational efficiency, optimize route networks, and expand service offerings to maintain competitiveness in an increasingly challenging market environment.
The June demand growth and price increases in Asia-Pacific air cargo reflect the combined effects of global economic recovery and shifting trade patterns. While uncertainties persist, industry players are proactively addressing challenges to seize opportunities for sustainable development in this evolving landscape.