Air cargo volumes are predicted by IATA to rise by 5.8% year on year to reach 72.5m tonnes in 2025, supported by e-commerce and Red Sea-related demand.
While demand is expected to continue to grow, the average yield is predicted to adjust downwards by 0.7%, but still remain well above pre-pandemic levels.
“Only a slight decline [in yield] is expected in 2024, and the yield should remain relatively stable in 2025,” IATA said.
With demand increasing and yields only slightly declining, cargo revenues are expected to reach $157bn (15.6% of total airline revenues) in 2025, said IATA.
Freight rates are expected to be $1.34, $0.06 less than in 2024 and 24.4% below 2014 levels.
Several trends are expected to continue to be favourable for air cargo in 2025.
“These include continued geopolitical uncertainty in sea shipments routed through the Suez Canal and booming e-commerce originating in Asia,” said IATA.
That said, speaking about Red Sea air benefits, the trade body said in its December ‘Global Outlook for Air Transport’ report: “This increased competitiveness could wane once all key nautical passages such as the Suez Canal and the Red Sea route are deemed safe for passage, or if shippers manage to introduce a substantial amount of new vessel capacity.”
The trade body noted that while fuel prices have dropped, staffing costs have risen and unresolved supply chain issues are creating a capacity challenge.
There are also a number of political risks for the air cargo and overall airline industry in 2025.
IATA indicated that changes to tariffs and trade with the incoming Trump administration are a major concern, but said there could also be benefits.
“Tariffs and trade wars would likely dampen demand for air cargo and potentially also impact business travel. Should these policies rekindle inflation with higher interest rates as a policy response, negative impacts on demand would be exacerbated.
“However, should the business-friendly stance of the first Trump administration continue into this term, gains from deregulation and business simplification could be significant. There is uncertainty regarding government support for aviation’s decarbonisation efforts in the US until the path that the new administration will take becomes clearer.”
Other concerns include a potential worsening of conflict in Europe and the Middle East, plus changes to oil prices.
IATA reported a robust performance for air cargo in 2024.
The cargo segment of IATA’s Global Outlook report stated: “Airlines are projected to achieve an all-time high in cargo tonne-kilometers (CTK), with demand expected to increase by an impressive 11.8% year on year in 2024. This remarkable growth follows two consecutive years of declining air cargo volumes as the industry adjusted after the exceptional pandemic peak.
“The surge in demand has been primarily driven by robust cross-border e-commerce and, to a lesser extent, capacity limitations in ocean shipping.”
Breaking performance down by region, IATA said year to date growth rates range from 6% to 16%.
“The strongest rise has been observed among airlines registered in the Middle East and Asia Pacific. In addition to the influence of e-commerce and of ocean shipping disruptions, some of these airlines also benefit from unrestricted access to Russian airspace.”
On the subject of capacity, IATA said that global available cargo tonne-kilometers (ACTKs) continued to grow in 2024 and “should continue to expand in 2025, though at a gradually decelerating rate”.
However, IATA director general Willie Walsh recently warned that the coming 12 months should be viewed with caution.
IATA: Air cargo demand robust in October but outlook less positive
IATA predicts a 4.5% rise in air cargo volumes in 2024
