IATA: Air cargo volumes forecast to grow 5.8% in 2025

IATA forecasts air cargo volumes to grow 5.8% in 2025, with favorable trends from e-commerce and demand in the Red Sea region, despite geopolitical and cost challenges.

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IATA forecasts air cargo volumes to grow 5.8% year-on-year to 72.5 million tonnes in 2025, driven by e-commerce and transport-related demand in the Red Sea region.

Although demand is expected to continue to grow, average yields are forecast to decline slightly by 0.7%, but remain significantly higher than pre-pandemic levels.

“Only a slight decline [in yield] is expected in 2024, and the yield should remain relatively stable in 2025,” IATA said.

With demand rising and average profits only falling slightly, cargo revenues are expected to reach $157 billion (15.6% of total airline revenues) in 2025, according to IATA.

Air freight rates are expected to reach $1.34 [\KG], down $0.06 from 2024 and 24.4% below 2014 levels.
A number of trends are expected to continue to favor air transport in 2025.

“These include continued geopolitical uncertainty in sea shipments routed through the Suez Canal and booming e-commerce originating in Asia,” IATA said.

However, when it comes to the advantage of air freight in relation to the Red Sea region, the organization said in its December “Global Outlook for Air Transport” report: “This increased competitiveness could wane once all key nautical passages such as the Suez Canal and the Red Sea route are deemed safe for passage, or if shippers manage to introduce a substantial amount of new vessel capacity.”

IATA also pointed out that despite falling fuel prices, rising personnel costs and unresolved supply chain issues are creating capacity challenges.

In addition, the air freight industry and the aviation industry in general will face many political risks in 2025.

IATA highlighted that changes in tariffs and trade under the new Trump administration are a major concern, but could also bring potential benefits.

“Tariffs and trade wars would likely dampen demand for air cargo and potentially also impact business travel. Should these policies rekindle inflation with higher interest rates as a policy response, negative impacts on demand would be exacerbated.”

“However, should the business-friendly stance of the first Trump administration continue into this term, gains from deregulation and business simplification could be significant. There is uncertainty regarding government support for aviation’s decarbonisation efforts in the US until the path that the new administration will take becomes clearer.”

Other concerns include the potential for further conflict in Europe and the Middle East as well as volatility in oil prices.

IATA sees a solid performance for the air transport industry in 2024.

In its “Global Outlook” report, the cargo segment said: “Airlines are projected to achieve an all-time high in cargo tonne-kilometers (CTK), with demand expected to increase by an impressive 11.8% year on year in 2024. This remarkable growth follows two consecutive years of declining air cargo volumes as the industry adjusted after the exceptional pandemic peak.”

“The surge in demand has been primarily driven by robust cross-border e-commerce and, to a lesser extent, capacity limitations in ocean shipping.”

Analyzing performance by region, IATA said year-to-date growth rates ranged from 6% to 16%.

“The strongest rise has been observed among airlines registered in the Middle East and Asia Pacific. In addition to the influence of e-commerce and of ocean shipping disruptions, some of these airlines also benefit from unrestricted access to Russian airspace.”

In terms of capacity, IATA said that global available cargo tonne-kilometers (ACTKs) will continue to increase in 2024 and “should continue to expand in 2025, though at a gradually decelerating rate.”

However, IATA Director General Willie Walsh recently warned that the next 12 months should be viewed with caution.

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