The International Air Transport Association (IATA) revealed that global demand for air freight decreased in October by 13.6 percent year-on-year, under pressure from the current global economic conditions and the strength of the dollar.
IATA said in a report on Wednesday that global air freight markets show that headwinds continue to affect demand for air freight.
According to the report, capacity decreased 0.6 percent last month, in the first annual contraction since April 2022.
Capacity increased month on month by 2.4 percent in preparation for the peak season at the end of the year; While international freight capacity grew by 2.4 percent compared to October 2021.
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The report indicated that new export orders, a leading indicator of demand for goods, were contracting in all markets except for China and South Korea, which registered slightly higher new export orders in October.
The report expected this to mainly benefit sea freight, with a slight increase in air freight as well.
He continued, “The dollar witnessed a sharp rise, as the broad effective exchange rate in September 2022 reached its highest level since 1986.”
A strong dollar affects air freight, since many costs are denominated in dollars, so a stronger currency adds another layer of cost to inflation and higher jet fuel prices.
The International Air Transport Association (IATA) was founded in 1945 and represents about 260 airlines around the world, contributing about 83 percent of global air traffic.
