Summary:
- Global air cargo demand outlook +4 to 6% year-on-year
- Global air cargo capacity forecast +3 to 4% year-on-year
- Delays in delivery of new and converted aircraft to impact supply growth
The three key themes explained in this report so far - namely, a resurgence in the traditional air cargo market, disruptions in ocean supply chains, and the rise of e-commerce - will all contribute to an expected global air cargo demand growth of 4-6% in 2025.
This is down from an estimated 11% for the full year 2024.
While the demand growth is expected to slow in 2025, importantly it will still outpace air cargo capacity supply, which is set to grow 3-4%. Measured in available cubic meters, this is down from an estimated 4% in 2024.
The capacity growth slowdown is in part due to a high base in 2024. Global air cargo capacity growth already recovered to pre-pandemic 2019 levels by early 2023. However, it took until 2024 for global demand to recover to its 2019 levels.
If demand growth does outpace supply growth in 2025, it is likely air freight rates will remain elevated - but it is important to remember that experiences will vary dramatically depending on the region and trade lane.
Demand and supply growth will not be spread evenly across the world's air cargo corridors - quite the opposite. If you are a shipper using an ex-Asia corridor you will have to consider very different supply/demand balance shifts compared to a business shipping goods out of South America.
Delays in aircraft delivery
Slower capacity growth in 2025 also stems from supply chain issues and manufacturing delays for new and converted aircraft.
Airbus has pushed back the delivery of its A350 freighter from late 2025 to 2026 (source: Air Cargo News). Similarly, Boeing has stated its 777-9 passenger aircraft wouldn't be delivered before 2026, while the 777-8 freighter would be delayed until 2028.
Looking further ahead, increasing environmental regulations could impact future growth of global air cargo capacity. For instance, ICAO aircraft emissions standards on all in-production aircraft are set to take effect in 2028 and will bring an end to the production of Boeing’s current 777 freighter and 767 freighter.
Geopolitical factors
A capacity growth slowdown is also a result of geopolitical issues. China and the US cargo belly capacity had only recovered to around one third of pre-pandemic 2019 levels in October. Currently, the US and China aviation authorities have a bilateral cap of 100 flights per week in total. This is significantly less than the 340 weekly flights prior to the pandemic. Another thing to note is that currently, US carriers are not even operating their share of 50 flights in the 100 cap. This comes as US airlines are also not able to fly cross Russian airspace.
“It is unlikely that the tight air freight market of 2024 will ease in 2025. It would be wise to manage the expectations of your internal stakeholders that your transportation spend might be higher next year."
Wenwen Zhang Air Freight Analyst, Xeneta