Belly Capacity Rises 28 Percent
According to IATA, belly cargo has risen 28 per cent of the global total, up four per cent in March 2020 when the Covid crisis brought international travel to a halt.
According to the International Air Transport Association (IATA), the recovery in some aviation markets has been stunning and whilst growth is driven by growing demand for passenger travel, the belly cargo capacity it brings back into service is urgently needed in the market.
IATA however only expects global passenger travel to return to the 2019 level of activity in 2024 and to expand substantially over the next two decades.
The trans-Atlantic trade lane has been the first major route to see available cargo capacity come back into the market. Over the last two months, carriers have brought on summer schedules and employed greater numbers of passenger flights. The injection of capacity between the EU and North America has been accompanied by a sharp drop in rates on these trade lanes. For example, rate levels on the westbound trans-Atlantic were recently down 70 per cent since this year’s high in mid-April.
However, there will be a large price to pay for the recovering aviation industry, with the survival of many airlines coming from financial support from governments through the Covid crisis and IATA estimated this support to be US$100 billion, most of it requiring repayment.
“While this has ensured the industry is well-placed to support the economic recovery and the rebound in passenger demand, the support has added to the debt burden and will impact airline balance sheets for some time to come,” said IATA.