Middle East air cargo capacity rises 1.5% despite falling demand
The rise in available cargo space, measured in available cargo tonne-kilometers, came amid route disruptions over parts of Iran, Iraq, Israel, and Lebanon. These factors drove the region's second consecutive monthly contraction in cargo volumes, according to the International Air Transport Association's latest air cargo market report.
The performance reflects a broader slowdown in global air cargo, with IATA's mid-year forecast projecting 0.7 percent volume growth, down from 11.3 percent in 2024.
The slowdown is attributed to rising protectionism, including new US tariffs and the rollback of de minimis exemptions on low-value imports, which could dampen e-commerce-related air freight.
'The June air cargo data made it very clear that stability and predictability are essential supports for trade,' said Willie Walsh, IATA's director general.
'Emerging clarity on US tariffs allows businesses greater confidence in planning. But we cannot overlook the fact that the 'deals' being struck are resulting in significantly higher tariffs on goods imported into the US than we had just a few months ago,' he added.
IATA reports a 0.8% year-on-year (YoY) increase in global #aircargo demand and a 1.7% monthly rise in capacity for June 2025, signaling modest recovery amid geopolitical and trade uncertainty.
Regional breakdown and details https://t.co/rcoPD1070l pic.twitter.com/vdjYAgvtOS
— IATA (@IATA) July 31, 2025
While the full economic impact of these trade cost barriers remains to be seen, Walsh said governments must step up efforts to make trade simpler, faster, cheaper, and more secure through digitalization.
The Asia-North America and Africa-Asia trade lanes each contracted by 4.8 percent, while Middle East-Europe declined by 4.5 percent. In contrast, trade between Europe and Asia expanded by 10.6 percent, maintaining 28 consecutive months of growth.
'Overall, air cargo demand grew by a modest 0.8 percent year-on-year in June, but there are very differing stories behind that number for the industry's major players,' Walsh said.
Trade tensions dragged North American traffic down 8.3 percent and left European growth at 0.8 percent, but Asia-Pacific defied the trend with a 9 percent expansion.
'Meanwhile, disruptions from military conflict in the Middle East saw the region's cargo traffic fall by 3.2 percent,' added Walsh.
Despite the challenging backdrop, some fundamentals remain supportive. Global industrial production rose 3.2 percent year on year in May, and goods trade increased by 3.5 percent.
Jet fuel prices in June were 12 percent lower than a year ago, easing cost pressures for carriers.
While the global Purchasing Managers' Index recovered to 51.2, signaling expansion, new export orders remained in contraction at 49.3.
Adding to the complexity of the regional dynamic, Middle East airlines are simultaneously expected to post the world's highest net profit margin in 2025 at 8.7 percent, according to IATA's June industry forecast presented at its 81st annual general meeting in New Delhi.
The region is projected to generate a net profit of $6.2 billion, up from $6.1 billion in 2024, and is expected to earn $27.20 per passenger, outpacing all global peers despite demand volatility and regional instability.
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