Air cargo volume growth is projected to halve in 2025, though the year is still expected to be favorable for carriers due to ongoing ocean shipping delays, tight freighter capacity, and robust cross-border e-commerce activities, forecasts the International Air Transport Association (IATA). According to the IATA, cargo volumes are anticipated to reach 80 million tons, reflecting a 5.8% increase from 2024.
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IATA reported that this year has seen air cargo demand expand between 10% and 13% year over year, contingent upon whether measurements are based on traffic or tons. This surge was largely fueled during the pandemic, generating volumes nearly akin to Q4 2021’s records.
In line with IATA’s outlook, freight data provider Xeneta forecasts a growth in air cargo demand of 4% to 6% next year, while consultancy Rotate anticipates approximately 4% growth. Concurrently, logistics giant DSV predicts a plateau in air cargo growth.
Market Dynamics and Revenue Insights
The current market stability, despite heavy demand, results from businesses moving shipments proactively and securing space via short-term contracts. IATA expects air cargo traffic in 2024 to rise by 11.8%, nearing all-time highs, with this dynamic upheld in 2025, when cargo revenue could reach $157 billion, contributing 15.6% to total airline revenues, a sizeable leap from 12% in 2019.
E-commerce has recently propelled air cargo growth significantly out of Asia, accounting for over 50% of volumes, while traditional B2B markets could rebound next year, driven by demand for semiconductors in AI and electric vehicles. The average global yield for October was markedly higher than 2019 levels, strengthening IATA’s modest forecast of a -3.5% decline in yield for 2024 and stability in 2025.
Challenges and Opportunities
The sector faces several challenges, such as potential customs regulatory shifts and geopolitical tensions. However, the prospective resurgence of the traditional airfreight market—augmented by logistical adaptations like Middle Eastern and European transshipment options—suggests continued adaptability within the industry.
Anticipated economic developments, like possible U.S. tariff escalations and a shifting regulatory landscape under returning President Donald Trump, may impact growth trajectories. Yet, potential labor disputes affecting U.S. coastal ports could spur increased air shipments, buoying the sector.
Economic Outlook and Strategic Focus
Anticipated total airline industry revenues could surpass $1 trillion next year, reflecting a promising financial trajectory, supported by more affordable jet fuel—expected to average $87 per barrel—and enhanced operational efficiencies. However, supply chain issues with aircraft and engine manufacturers remain a limiting factor.
With labor costs set to rise but unit labor costs remaining steady due to productivity gains, the airline industry faces a tight profit margin. IATA Director General Willie Walsh underscores the need for relentless cost management and efficiency as airlines navigate post-pandemic growth and infrastructure challenges.
Source: IndexBox Market Intelligence Platform Â
