Global Air Cargo Market Dips in February Amid Leap Year, Geopolitical Tensions

According to IATA, total air cargo demand, measured in cargo tonne-kilometers (CTKs), decreased by 0.1% compared to February 2024.

The International Air Transport Association (IATA) has released its analysis of the global air cargo market for February 2025, revealing the first year-on-year contraction in air freight demand since mid-2023. While the overall decline was marginal, it reflects a complex mix of economic, seasonal, and geopolitical factors currently shaping the aviation logistics landscape.

Modest Contraction in Demand and Capacity

According to IATA, total air cargo demand, measured in cargo tonne-kilometers (CTKs), decreased by 0.1% compared to February 2024. International operations, however, managed to grow modestly at 0.4%. On the capacity side, available cargo tonne-kilometers (ACTKs) declined 0.4% globally, while international capacity increased slightly by 1.1%.

A key caveat to these figures is the calendar anomaly: February 2024 was a leap year and benefited from an extra trading day, making year-on-year comparisons somewhat skewed. Additionally, February 2024 saw a spike in cargo traffic driven by the convergence of the Chinese New Year, disruptions to sea shipping routes, and a surge in e-commerce activity.

Rising Trade Tensions Cloud Market Outlook

Commenting on the data, IATA’s Director General Willie Walsh acknowledged the unique factors behind February’s dip, but cautioned about growing protectionism. “February saw a small contraction in air cargo demand, the first year-on-year decline since mid-2023. Much of this is explained by February 2024 being extraordinary—a leap year that was also boosted by Chinese New Year traffic, sea lane closures and a boom in e-commerce,” he said.

“Rising trade tensions are, of course, a concern for air cargo. With equity markets already showing their discomfort, we urge governments to focus on dialogue over tariffs,” Walsh added.

Economic Environment: Signals of Growth and Risk

Despite the dip in air cargo volumes, broader economic indicators point to some underlying strength. In January 2025, the global industrial production index rose by 3.2% year-on-year—its strongest growth in two years. World trade volumes also surged, expanding by 5%.

Fuel costs showed a slight reprieve, with jet fuel prices averaging $94.6 per barrel in February, a 2.1% decline from January levels.

The manufacturing sector showed signs of momentum. The global Purchasing Managers’ Index (PMI) for output stood at 51.5, remaining above the crucial 50 threshold that indicates expansion. However, the PMI for new export orders came in at 49.60, a slight increase from the prior month but still below the 50-mark, reflecting caution among manufacturers.

Inflation remained elevated in major economies such as the U.S., Europe, and Japan, although it showed minor signs of easing. Conversely, China experienced a year-on-year decline in consumer prices—the first in nearly a year—highlighting concerns about deflationary pressures in the world’s second-largest economy.

Regional Performance: Latin America and Asia-Pacific Outperform

Air cargo performance varied sharply across regions in February:

• Asia-Pacific carriers posted a strong 5.1% year-on-year growth in demand, with capacity up 2.7%. The region benefited from robust intra-Asia trade and strong exports to North America and Europe.

• Latin America led in growth, recording a 6.0% increase in demand—the highest globally—on the back of expanding trade flows and increased belly capacity (+7.6%).

• North American airlines experienced a modest 0.4% decline in demand, while capacity dropped by 3.5%. Despite the contraction, North America remains a key hub with resilient Trans-Pacific and Transatlantic trade.

• Europe saw a nearly flat performance, with a slight 0.1% drop in demand and a 0.2% reduction in capacity. Load factors remained high at 58.1%, the strongest among all regions.

• Middle Eastern carriers were the hardest hit, with demand falling 11.9% and capacity down 4.0%. Declines in key trade lanes such as Middle East–Asia and Middle East–Europe weighed heavily.

• African carriers saw demand shrink by 5.7%, while capacity fell by 0.6%. The region’s air cargo sector continues to struggle with limited infrastructure and weaker trade links.

Load Factors and Market Efficiency

Global cargo load factor (CLF)—a measure of capacity utilization—stood at 45.0%, marginally higher than in February 2024. Europe led the regions with the highest load factor at 58.1%, followed by Asia-Pacific at 44.5%. North America and Latin America posted lower load factors, at 39.9% and 36.5% respectively, indicating underutilization in some markets.

Trade Lane Analysis: Intra-Asia and Europe-Asia Lead

Trade lane performance offered a more optimistic picture, particularly within Asia:

• Intra-Asia trade surged by 9.0% year-on-year, the highest among all lanes, buoyed by robust regional economic activity and manufacturing resilience.

• Europe–Asia recorded 4.7% growth, continuing a 24-month streak of expansion.

• North America–Europe also performed well with 4.5% growth.

• Asia–North America grew slightly by 0.1%, marking 16 consecutive months of positive performance.

• Middle East–Europe and Middle East–Asia saw steep declines of 14.1% and 6.2%, respectively.

• The Africa–Asia corridor suffered a major contraction of 30.0%, reflecting broader economic challenges in the region.

Looking Ahead

Despite the February setback, the air cargo industry remains fundamentally stable, supported by improving economic indicators and continued recovery in global trade. However, challenges remain in the form of geopolitical tensions, potential protectionist policies, and inflationary pressures.

The industry will be closely watching trends in industrial production, consumer spending, and manufacturing orders, as well as the upcoming impact of new trade agreements and regulatory changes. While February's results may be a statistical outlier, they serve as a reminder that the global air cargo market is highly sensitive to both macroeconomic and geopolitical developments.