Asia-Pacific carriers reported the highest year-on-year (YoY) growth in March at 9.6 percent, significantly above the previous month’s 5.2 percent. This is unsurprising given the region’s critical role in global manufacturing and its close trade ties with both the US and Europe. The Asia–North America trade lane grew by 7.3 percent, reversing a revised -0.5 percent contraction in February.

“Current events may have contributed to the boost,” IATA noted, pointing to the urgency of pre-tariff shipments. Capacity for Asia-Pacific carriers also rose by 11.3 percent, outpacing demand but still producing a respectable load factor (CLF) of 55.2 percent.

North America and Europe rebound

North American airlines posted a 9.5 percent rise in international demand, up dramatically from a 1.3 percent decline in February. Capacity rose 6.1 percent, pushing the CLF to 51 percent, a full 1.5 percentage points above last year. The North America–Europe route, one of the most heavily trafficked, grew by 8.5 percent YoY and has now shown consistent expansion for 14 consecutive months.

European carriers also saw improvement, with 4.5 percent growth in international cargo tonne kilometres (CTKs) and modest capacity increases. Their CLF hit 62.1 percent, the highest among all regions.

Latin America grows steadily

Airlines in Latin America posted a 5.8 percent rise in international demand. While the region remains a small player (just 2.5 percent of global international CTKs), it has demonstrated consistent resilience. Capacity rose 4.7 percent, and the CLF climbed by 0.5 percentage points to 45.0 percent.

Middle East and Africa

By contrast, the Middle East and Africa continue to face headwinds. Middle Eastern carriers saw a YoY drop of 3.2 percent in international demand, though this was a clear improvement from February’s steep 12.1 percent fall. Capacity rose slightly (0.8 percent), but load factors declined to 48.0 percent.

Africa reported the weakest performance globally. CTKs plummeted by 13.4 percent, while capacity surged 10.5 percent, pushing the CLF down by a striking 10.5 percentage points to just 38.1 percent. This marks the fourth straight month of decline for the Africa–Asia corridor, which contracted 40.2 percent YoY.

IATA’s route-specific data paints a granular picture of March dynamics:

Europe–North America: +8.5 percent, marking strong recovery and continued resilience.

Europe–Asia: +8.3 percent, now with 25 consecutive months of growth.

Asia–North America: +7.3 percent, rebounding after February’s dip.

Within Asia: +5.5 percent, maintaining momentum with 17 consecutive months of gains.

Middle East–Asia: +2.9 percent, steady but sluggish.

Europe–Middle East: -7.5 percent, reflecting weakened flows in the wake of earlier disruptions.

Within Europe: -5.2 percent, suggesting structural challenges.

Africa–Asia: -40.2 percent, the steepest decline of any route.

Trade imbalances are widening, particularly where supply chains depend on politically sensitive or energy-intensive flows. The Africa–Asia corridor’s sustained contraction reflects both demand softness and competitive modal shifts—particularly via ocean freight.

Available cargo tonne-kilometres (ACTKs) grew 4.3 percent YoY in March, mirroring demand and easing fears of capacity shortages. However, this marks a slowdown from the 10.6 percent YoY increase seen in March 2024. Capacity utilisation (CLF) ended at 47.5 percent, essentially flat from a year earlier.

Regionally, Europe led with a 59.6 percent CLF, followed by Asia-Pacific (48.6 percent) and the Middle East (47.6 percent). North America and Latin America posted CLFs just above 40 percent, while Africa slid to 37.1 percent.

A notable shift occurred in the composition of capacity: belly-hold space—primarily in passenger aircraft—reached a record high, rising 5.9 percent YoY. Dedicated freighter capacity grew even faster, up 6.4 percent, nearly regaining the peak volumes seen in March 2021.

This marks a sharp rebound from February’s contraction in freighter availability (-1.2 percent) and suggests operators are adjusting fleets quickly in response to volatile demand patterns.

March also brought relief on the cost side. Jet fuel prices plunged 17.3 percent YoY to US$88.9 per barrel, marking nine consecutive months of annual decline. The decline outpaced that of crude oil, narrowing the jet fuel crack spread to US$16.3—down 26.2 percent from last March.

With lower fuel costs and stronger demand, air cargo yields finally reversed their recent downward trend, rising 3.8 percent YoY and 6.6 percent from February.

Macro environment

Global industrial production grew 3.2 percent in March, while trade volumes expanded 2.9 percent. These numbers are broadly positive, but IATA warns that the pace of expansion has slowed. Since October 2024, trade growth has remained under 5 percent—a stark contrast to the double-digit rebounds seen during the post-pandemic surge.

March also saw the first month-on-month trade increase in 2025, with a 1.2 percent rise. While encouraging, it’s unclear whether this represents the start of a new trend or a one-off reaction to external shocks.

The Purchasing Managers’ Index (PMI) for global manufacturing dipped to 50.49, barely above the neutral threshold, down from 51.52 in February. Export orders improved to 50.12, but IATA cautions that “some of the increase may be due to companies rushing to place orders ahead of anticipated US tariffs.”

Inflation trends offer stability

In advanced economies, inflation is cooling:

United States: 2.4 percent CPI in March (down 0.4 points).

EU: 2.5 percent CPI, also declining.

Japan: 3.6 percent, down slightly.

China: -0.1 percent, still in deflation but improving from -0.7 percent.

Producer price indices (PPIs) suggest continued stability in input costs. The U.S. PPI eased to 2.8 percent, while Japan’s rose slightly to 4.2 percent. China’s PPI slowed to 0.3 percent, and Europe posted 3.1 percent YoY growth in February, with March data pending.

Risks ahead

While the March rebound may give operators breathing room, structural headwinds remain: Geopolitical risk is rising. Trade tensions between the US and China are escalating, and tariff-related volatility may persist. Ocean freight competition is intensifying, particularly on longer routes where fuel costs matter more.

Belly capacity recovery may pressure yields, especially on transatlantic routes dominated by passenger aircraft.

Africa and Middle East softness could persist, especially if global manufacturing slows or energy market disruptions return.

March 2025 offered the air cargo sector a much-needed boost. Volume growth returned, yields recovered, and capacity expanded in balance with demand. But the underlying causes—mainly geopolitical hedging—suggest caution rather than celebration.

As Walsh warned, “We hope that political leaders will be able to shift trade tensions to reliable agreements that can restore confidence in global supply chains.” Until that happens, the industry must navigate through a fog of uncertainty, making resilience and agility more critical than ever.