Global Air Cargo Market Soars in March 2025 as Trade Tensions and Fuel Prices Shape Trends

As Willie Walsh summarized, “We hope that political leaders will be able to shift trade tensions to reliable agreements that can restore confidence in global supply chains.”

The International Air Transport Association (IATA) has released its air cargo performance data for March 2025, revealing robust global growth in freight traffic amid mounting trade policy uncertainties and favorable fuel cost dynamics. Total demand, measured in cargo tonne-kilometers (CTKs), surged 4.4% compared to March 2024, with international operations climbing an even stronger 5.5%. This marks the highest recorded level for March cargo volumes in IATA's tracking history, highlighting a significant rebound in global air logistics.

Capacity Expansion Parallels Demand Growth

Air cargo capacity, measured in available cargo tonne-kilometers (ACTKs), also experienced notable growth, increasing by 4.3% year-on-year. International capacity expanded by 6.1%, a sign that airlines have been actively scaling up to match the elevated demand.

According to IATA Director General Willie Walsh, “March cargo volumes were strong. It is possible that this is partly a front-loading of demand as some businesses tried to beat the well-telegraphed 2 April tariff announcement by the Trump Administration.” He also noted that despite the geopolitical uncertainties, the temporary decline in fuel costs is acting as a cushion for the air cargo sector.

Trade Dynamics and Economic Signals

Several macroeconomic indicators and trade policy developments played a pivotal role in shaping the March performance:

• Tariff Front-Loading: Businesses and shippers rushed to move goods before the 2 April announcement of U.S. tariffs and an anticipated 2 May ban on duty-free imports from China and Hong Kong. This front-loading likely inflated March shipment volumes temporarily.

• Fuel Price Relief: Jet fuel prices dropped 17.3% year-on-year, marking the ninth consecutive month of decline. This reduction helped airlines manage operating costs despite the surge in volume.

• Global Trade and Industry Growth: World industrial output grew by 3.2%, while global trade volumes increased by 2.9%, lending structural support to the air cargo sector. Inflation remained largely contained or declining across key markets—U.S. inflation dropped to 2.4%, EU inflation held at 2.5%, and Japan’s rate fell slightly to 3.6%. China remained in a mild deflationary phase at -0.1%.

Regional Performance Breakdown

The regional performance varied significantly, reflecting diverse economic and geopolitical contexts:

• Asia-Pacific: Leading all regions, Asia-Pacific carriers recorded a 9.6% year-on-year increase in demand, supported by an 11.3% rise in capacity. The region benefited from early shipments tied to expected tariff hikes and continued e-commerce momentum.

• North America: Demand grew 9.5% year-on-year, with capacity up by 6.1%. Strong domestic consumption and pre-tariff shipments to and from Asia contributed to the high figures.

• Europe: European airlines experienced 4.5% growth in demand and a modest 2.0% capacity increase. Stable manufacturing activity and steady export demand supported this growth.

• Middle East: A contraction of -3.2% in demand was observed, despite a 0.8% capacity increase. This decline may be a result of comparison against strong early-2024 performance during Red Sea shipping disruptions.

• Latin America: The region saw demand rise by 5.8%, with a 4.7% increase in capacity. Continued growth in agricultural exports and U.S.-bound shipments bolstered performance.

• Africa: African airlines faced the steepest decline, with demand falling -13.4% year-on-year, although capacity increased by 10.5%. Weak regional trade and limited bellyhold capacity utilization contributed to the drop.

Trade Lanes: Strengths and Weaknesses

Among major trade routes:

• The Europe–North America corridor emerged as the busiest trade lane, driven by steady transatlantic trade activity.

• The Asia–North America lane also recorded strong growth, influenced by tariff-driven front-loading.

• Conversely, the Europe–Middle East and Africa–Asia lanes experienced contractions, highlighting continued disruptions and weaker interregional connectivity.

Outlook: Short-Term Boost, Long-Term Questions

While March figures present a healthy picture of global air cargo, much of the demand appears to have been accelerated due to anticipated policy changes rather than organic long-term growth. The lasting impact of new U.S. tariffs, supply chain shifts, and ongoing geopolitical friction will likely shape air cargo trends in the coming quarters.

As Willie Walsh summarized, “We hope that political leaders will be able to shift trade tensions to reliable agreements that can restore confidence in global supply chains.” Until then, the industry continues to benefit from temporary cost advantages while remaining on alert for policy-induced volatility.