European slump hits Middle East air cargo demand

• Demand down in Middle East
• Despite global growth
• European routes impacted

Demand for air cargo in the Middle East declined year on year in March, bucking a global growth trend, with the region’s European trade route the hardest hit.

New monthly data from industry trade body the International Air Transport Association (IATA), showed that total global demand, measured in cargo tonne-kilometres (CTK), rose 4.4 percent year on year in March.

IATA said that while this was a global historic peak for March, demand in the Middle East was down 3.2 percent year on year over the same period.

While capacity increased by 0.8 percent year-on-year, IATA speculated that “the weakness in this market is due to year-on-year comparison with the strong growth at the start of 2024 resulting from disruption to Red Sea maritime freight”.

Attacks on shipping in the Red Sea by Houthi rebels did see a significant shift away from freight to air cargo last year. Saudi Arabia’s airports reported that in 2024 air cargo shipments increased by more than half.

The biggest trade route to be impacted was the Middle East-Europe corridor, where demand declined 7.5 percent year on year in March.

• Shipping giants not yet ready to resume Red Sea route
• Houthis target three ships in Red and Arabian Seas
• Mid-East passenger demand keeps rising but cargo slows

This was evident in the results of the latest GEP Global Supply Chain Volatility Index, which painted a downbeat impression of demand in Europe.

The index reported that Europe was still facing a “still-high level of underutilisation” across its supply chain. At the same time, the UK supply chain index hit a near five-year low as a result of British “procurement managers significantly reducing buying and inventories as the country’s economy shows signs of slowing”.

The data comes as Emirates, the Gulf’s largest airline, launched a premium package delivery service, in a bid to open up new revenue streams from its existing fleet.