According to IATA, Latin America is once again the #1 airfreight region with a remarkable year-on-year increase of total air cargo traffic of 9.2%. The overall expansion of economic activity in the first half of the year was led by the service sectors commerce and transportation. Above all, air cargo has been a vital factor in supporting the economy in this region. The International Council of Airports in Latin America predicts that local air cargo in the region will continue to grow in line with e-commerce powered bydifferent retailers such as Amazon, Mercado libre or Alibaba.
Consequently, airports have decided to invest in infrastructure and technology. It has also been predicted lack of semiconductors in the highly airfreight dependent Mexican automotive industry will seebe less of an issue in the second half of the year, thus enabling vehicle manufacturers to ramp up production.
With fewer COVID cases and easing restrictions, airlines and operators show great optimism for the LATAM region. IATA reports that airlines in Latin America continued to be the strongest performing in July 2022, with international airfreight traffic increasing by 10.5% year-on-year. Airlines such as Iberia and Cathay Pacific have increased capacities by expanding their networks, introducing or re-establishing services and increasing flight frequencies. In the coming months, some airlines will invest in additional aircraft specifically for air cargo purposes. For instance the arrival of the fourth converted 767 freighter brings Avianca’s all-cargo fleet to fifteen 767 freighters, with six further 767F scheduled to join the fleet next year. To meet the current demand, forwarding companies have contributed to the increase in air cargo volumes by launching new air freight products such as charter services to their customers.
But even though the economy of Latin America has continued its strong post-pandemic rebound, the winds are shifting as global financial conditions are worsening. With increasing inflation around the world, global demand is weakening. The positive July performance of Latin Americas airfreight traffic is therefore much weaker than the June 2022 increase of 23.5% year-on-year.
Nevertheless, amid geopolitical and financial challenges the numerous high-impact factors make forecasts of Latin America´s economy and the development of the airfreight industry highly uncertain and complex. The next months will show how Latin America´s economy can adapt to the complex business environment and how the airfreight market will continue to develop relate to it.