Air cargo: more virus-proof than air passengers – but not enough

Air cargo traffic tends to be more sensitive to economic growth than passenger demand and also a lead indicator. Already showing negative growth in 2019, cargo contributed only 12% of world airline revenue last year.

However, given air cargo's usual added sensitivity to economic downturns, it is ironic that it is currently proving more robust than passenger traffic. Crucial for keeping supply chains open, particularly for food, pharmaceuticals and other essential sectors, air freight is not subject to the same COVID-19-related restrictions as passengers.

Freighters in service are relatively stable compared with passenger aircraft, particularly among widebodies. However, passenger belly space is a massive contributor to cargo capacity. Reduced passenger networks mean that cargo capacity has fallen heavily year-on-year in all regions, but less so than passenger capacity.

According to IATA analysis published on 31-Mar-2020, airline industry revenue for 2Q2020 is expected to fall by 68% year-on-year. This is less than the anticipated 71% drop in RPKs, thanks in part to cargo revenue, but not by much.

Cargo revenue certainly helps, but is not enough.