Air Cargo Dips, Passenger Demand Soars in February 2025 Despite Leap Year Distortion

Global air cargo demand, measured in cargo tonne-kilometers (CTK), declined marginally by 0.1% year-on-year in February 2025.

The International Air Transport Association (IATA) has released data for February 2025, offering a comprehensive snapshot of global air cargo and passenger markets. While the air cargo sector recorded its first decline since mid-2023, international passenger travel continued its upward momentum, with several regions posting record-breaking demand levels for the month.

Air Cargo Market: First Dip Since Mid-2023

Global air cargo demand, measured in cargo tonne-kilometers (CTK), declined marginally by 0.1% year-on-year in February 2025. International cargo operations fared slightly better with a 0.4% increase. Capacity, measured in available cargo tonne-kilometers (ACTK), decreased by 0.4% overall, though international capacity rose by 1.1%.

However, it's important to note that year-on-year comparisons are skewed due to February 2024 being a leap year, providing an additional day of operation and coinciding with a surge in e-commerce, sea freight disruptions, and Lunar New Year travel.

“February saw a small contraction in air cargo demand, the first year-on-year decline since mid-2023,” said Willie Walsh, IATA’s Director General. “Much of this is explained by February 2024 being extraordinary—a leap year that was also boosted by Chinese New Year traffic, sea lane closures, and a boom in e-commerce. Rising trade tensions are, of course, a concern for air cargo.”

Operating Environment: Global Trade Momentum and Jet Fuel Trends

Despite the slight drop in cargo volumes, underlying macroeconomic indicators were largely positive:

• Industrial production rose 3.2% year-on-year in January, marking the strongest growth in two years.

• Global trade expanded by 5%, suggesting robust movement of goods internationally.

• Jet fuel prices averaged $94.6/barrel in February, down 2.1% from January, offering some cost relief to airlines.

• The global manufacturing PMI remained in growth territory at 51.5, while new export orders edged up to 49.6, still slightly below the 50-mark that signifies expansion.

On the inflation front, the US, Europe, and Japan continued to see elevated consumer price levels, although inflation eased slightly. In contrast, China experienced deflation, marking the first consumer price drop in nearly a year, further signaling persistent economic softness.

Passenger Market: Growth Across International Routes

The total global passenger demand (measured in revenue passenger-kilometers or RPKs) increased by 2.6% year-on-year, outpacing capacity growth of 2.0%, which pushed the overall load factor up by 0.4 percentage points to 81.1%.

Regional Passenger Highlights (International Traffic):

• Asia-Pacific carriers led with a 9.5% increase in demand, reflecting continued post-COVID recovery and robust regional travel. The load factor hit 85.7%, up 0.9 ppt.

• European airlines grew demand by 5.7%, with a load factor of 75.5%, boosted by strong intra-European and transatlantic traffic.

• Middle Eastern carriers saw 3.1% growth, with capacity rising only 1.3%, pushing their load factor up to 81.9%, the largest regional improvement (+1.4 ppt).

• Latin American airlines recorded 6.7% growth, but higher capacity expansion (+9.9%) caused their load factor to dip 2.5 ppt to 81.7%.

• African carriers matched Latin America with 6.7% growth in demand, achieving a load factor of 75.3%, up 2.0 ppt, indicating efficient capacity use.

• North America was the only region to post a decline (-1.5%), with capacity contracting by 3.2%. Interestingly, the region still improved its load factor to 78.9% (+1.3 ppt), implying airlines adjusted capacity effectively in the face of softening demand.

Domestic Market: Mixed Signals with India Leading the Pack

Overall domestic passenger traffic fell by 1.9%, mainly due to calendar effects and localized economic factors. The global domestic load factor was 82.6%, only slightly down (-0.2 ppt).

Domestic Market Standouts:

• India led global markets with a remarkable 13.2% surge in domestic demand, maintaining a record-high load factor of 90.3% (+1.4 ppt).

• Brazil posted a strong 8.0% growth with an improved load factor of 80.3% (+2.9 ppt).

• Japan recorded 5.8% growth, and the load factor soared to 83.9% (+5.5 ppt), supported by domestic tourism and easing COVID-related travel restrictions.

• China experienced a 3.2% decline in demand, largely attributed to the Lunar New Year shift from February in 2024 to January in 2025.

• The US domestic market dropped 4.2%, with consumer confidence playing a key role. The load factor decreased to 78.7%, down 2.5 ppt.

• Australia also saw a downturn of 3.8% in demand, though its load factor improved slightly to 74.3% (+1.3 ppt), suggesting effective fleet management.

Outlook: Navigating Trade Tensions and Economic Uncertainty

While February’s data shows a temporary setback for air cargo, broader economic trends remain encouraging. The uptick in global industrial activity, export orders, and trade volume supports the potential for cargo recovery. However, geopolitical tensions and trade restrictions remain significant headwinds.

Passenger markets, particularly international travel, continue to exhibit strong recovery momentum, although regional disparities are becoming more pronounced. Domestic markets are heavily influenced by calendar effects, economic confidence, and local conditions, which will likely drive variable performance in the coming months.

With inflation still sticky and fuel prices fluctuating, airlines will need to remain agile in managing capacity and pricing strategies. Nonetheless, the resilience of demand—especially in Asia-Pacific and India—provides a promising foundation for continued industry recovery in 2025.