Air cargo revenue to grow in 2020, as total airline revenue halves

According to IATA, air cargo traffic measured in cargo tonne kilometres fell by 27.7% year-on-year in Apr-2020. This extended the period of negative growth to its 18th consecutive month.

Whereas declining cargo volumes had previously reflected weakening global trade and slowing economic growth, the Apr-2020 figure demonstrated the devastating impact of COVID-19.

Nevertheless, cargo traffic is strongly outperforming passenger traffic. IATA even expects cargo revenue to grow in 2020 (by 8%, versus a 61% fall for passenger revenue).

Visibility on airline revenue performance is currently limited pending 2Q2020 results reporting. Data from the two leading Taiwanese operators, which report monthly, give some additional reference points.

China Airlines' cargo revenue was up by 153% in May-2020, and EVA Air's was up by 161%. Much of the revenue growth was driven by yield strength. These results cannot necessarily be extrapolated to all airlines, but they illustrate cargo's strength in the depths of the crisis.

However, although air cargo is proving more robust than the passenger side of the business, it will not be enough for the world airline industry to avoid a record loss in 2020.