India-Europe air cargo volumes soar due to apparel exports and Red Sea freight issues.
The India to Europe air cargo market has seen a significant surge in volumes, attributed largely to increased demand for apparel exports from India and Sri Lanka. This uptick coincides with disruptions to ocean freight services in the Red Sea region, prompting shippers to opt for air transportation for some of their cargo.
According to latest update, air cargo demand for the week ending February 25, 2024, was 40 percent higher than the 2019 weekly average. Although volumes have slightly dipped since then, they remain 24 percent above the 2019 weekly average as of the week ending March 24. With cargo capacity remaining relatively stable, the load factor from India to Europe climbed to 87 percent in the week ending March 24, the highest level since April 2022.
This surge has also affected pricing dynamics, with larger cargo volumes being charged at a higher rate per kg compared to smaller volumes, a trend reminiscent of the onset of the Covid-19 pandemic. International air freight from Indian airports reported a 30 percent increase in February, totaling 185,610 tonnes, while for the April-February period, international freight carried was up eight percent at 1.8 million tonnes.
The conflict in the Red Sea region continues to impact market dynamics, with ocean containerized spot rates experiencing a significant increase since December. Despite a slight dip in air cargo demand since February, the underlying economic indicators suggest evidence of demand growth, particularly in India’s production sector. Given the unpredictability of geopolitical and environmental factors, further disruptions in the air and ocean freight markets cannot be ruled out in 2024.
