Asia-Pacific Air Cargo Booms in July, Fueled by U.S. Tariffs

According to AAPA, Asia-Pacific airlines recorded a sharp increase in cargo volumes for July 2025, largely due to front-loading activities ahead of new U.S. tariffs, but the outlook ahead is expected to be volatile.

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Preliminary figures from the Association of Asia Pacific Airlines (AAPA) show that international air cargo demand continued its strong growth in July 2025, fueled by exporters expediting shipments ahead of new U.S. tariffs coming into effect.

Accordingly, cargo demand, measured in freight tonne-kilometres (FTKs), increased by 8.6% year-on-year, outpacing the 6.4% growth in offered capacity. This helped the average freight load factor to increase by 1.2 percentage points to 62.0%. These results demonstrate the resilience of the region's carriers despite a general weakening of global trade flows.

The passenger market also remained buoyant, with Asia-Pacific airlines carrying 33.4 million international passengers in July – a 7.7% increase compared to the same month last year. Demand measured in revenue passenger-kilometres (RPKs) grew by 8%, while offered capacity expanded slightly faster at 8.6%, causing the average passenger load factor to dip by a marginal 0.4 percentage points to 82%.

AAPA stated that while travel demand continued to support passenger growth, cargo volumes clearly reflected frontloading activity as shippers rushed to move goods before tariffs on U.S.-bound exports took effect in early August. Industry observers forecast greater volatility in cargo flows in the coming months as the impact of trade restrictions becomes more apparent across the supply chain.

Commenting on the results, Subhas Menon, AAPA Director General, said: "Strong demand growth on routes connecting North East Asia and South Asia, together with the expansion of network connections, continued to stimulate traffic."

"During the same period, air cargo demand grew by 6.5% year-on-year, building on last year’s strong performance. Inventory build-ups ahead of the introduction of tariffs by the U.S., along with the rerouting of shipments and diversification of sourcing, contributed to the growth in volumes, as businesses prioritised the speed and reliability afforded by air shipments."

Looking ahead, Menon noted: "The global economic outlook remains broadly positive, with healthy forward booking volumes supporting growth in travel markets. However, the implementation of tariffs is expected to add some uncertainty in air cargo markets, and could weigh on future demand."

On the cost side, Menon pointed out that a 15% year-to-date decline in jet fuel prices to an average of $89 per barrel, coupled with a weaker U.S. dollar against some regional currencies, is helping to offset cost pressures arising from ongoing supply chain disruptions. "Overall, Asian airlines remain focused on disciplined cost management while pursuing new revenue opportunities to support growth and sustain profitability," he concluded.

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