top of page
Laser Shipping T/A Laser Global Logistics

AIR CARGO DEMAND UP 1.5%, FIRST ANNUAL GROWTH SINCE FEBRUARY 2022 (Article from IATA)

Geneva - The International Air Transport Association (IATA) released data for August 2023 global air cargo markets, showing that year-on-year air cargo demand grew for the first time in 19 months.

Global demand, measured in cargo tonne-kilometers (CTKs*), increased by 1.5% compared to August 2022 levels (2% for international operations).



Capacity, measured in available cargo tonne-kilometers (ACTKs), was up 12.2% compared to August 2022 (11.8% for international operations). This was largely related to belly capacity which rose 30% year-on-year as airlines ramped-up operations to meet peak-northern summer travel season demand.

Several factors in the operating environment should be noted:


In August, both the manufacturing output Purchasing Managers Index or PMI (49.4) and new export orders PMI (47.0) saw a slight improvement to the previous month. They remained, however, below the critical threshold represented by the 50 mark, indicating a continuing, if slower, annual decline in global manufacturing production and exports.

  • Global cross-border trade contracted for the fourth month in a row in July, decreasing 3.2% year-over-year. This reflects the cooling demand environment and general macroeconomic conditions.

  • Inflation saw a mixed picture in August, with an increase in US consumer prices for the second month in a row. Meanwhile in Europe and Japan, consumer and producer prices fell. In China, which is fighting deflationary pressures, consumer prices rose.

“Air cargo demand grew by 1.5% over the previous August. This is the first year-on-year growth in 19 months, so it is certainly welcome news. But it is off a low 2022 base and market signals are mixed. Looking ahead, while many uncertainties remain, we can take some optimism from PMI data moving towards positive territory. This is particularly significant as we head into air cargo’s traditional peak year-end season,” said Willie Walsh, IATA’s Director General.




According to regional oil and gas experts the shift by Europe towards a green energy transition has not been well thought out and could leave the continent with massive energy bills in the future and has resulted in energy suppliers shifting their focus from Europe to Asia. Qatar is a case in point with the country’s gas reserves now largely sold under long term contracts with 70% of production heading east to Japan and China, in large part, with more contracts on the way. Jamie Ingrams, a senior editor at the Middle East Economic Survey, told Seatrade Maritime, “The shift [from Europe to Asia] happened a few years ago, partially because of lower European demand for LNG, and that was in part because of offshore wind and green energy and then obviously Germany became more and more hooked on Russian pipeline gas.” In concert with the European shift to green energy demand for gas in Asia increased sharply, said Ingrams. “After the nuclear disaster in Japan the country suddenly swore off nuclear, but it needed to get its energy from somewhere. So, Qatar was happy to fill that gap by supplying it with energy. Then China, as its economy expanded and it sought to wean itself off coal, has pivoted more and more to towards LNG, becoming the world's largest energy importer,” explained Ingrams. Dr Mamdouh G Salameh, an international oil economist and global energy expert, agreed with Ingram’s analysis. “The energy crisis started in January 2021, fourteen months before the Ukraine conflict, because of the EU’s hasty and flawed green policies of accelerating the energy transition to renewables at the expense of fossil fuels.” According to Salameh the Russia/Ukraine co


nflict transformed the EU energy crisis into a global one. “It shifted the flow of Russian energy exports from West to East and led to very high prices as a result of the unprecedented Western sanctions against Russia.” It was in November 2022 that China and Qatar signed two 27-year deals to for the development of the North Field East and North Field South (NFE and NFS) for the extraction of 4mtpa of LNG from each field, firmly fixing the country’s gaze eastwards towards Asian markets. Meanwhile, the EU, which relied on cheap piped gas from Russia with up to 45% of its requirements from Russian reserves, needed to replace that energy, but EU states, Germany in particular, did not want to sign long term LNG contracts because they did not meet the EU’s long-term green energy goals. “Now they are being forced to sign long-term contracts with LNG producers including Qatar,” explained Salameh. Germany’s 15-year contract to import Qatari LNG, like the China deals was signed late last year, should be seen in this context. Berlin had wanted a shorter contract, but Qatar had remained steadfast in its plan to only take on longer deals. In the end Qatar agreed a deal with US firm Conoco Phillips to supply Germany with LNG. “That's the first long term deal that Qatar struck with a European buyer in a long time,” said Ingrams “Germany is new to the game of importing energy, so it's their very first deal to secure Qatar gas, that was very much a landmark development.” Meanwhile, Qatar Energy (QE) has stated that it will reduce the level of gas that it offers on the spot market to between 5% and 10%, in favour of pushing for long-term contracts. Charles Ellinas, an LNG consultant of Cypriot descent, who spends much of his time in London, argued that Qatar believes security of supply as well as stability into the future, “irrespective of how the global markets develop,” is crucial, not only for its customers, but also “to secure its own financial future”. 


According to Ellinas Qatar was the world’s largest LNG exporter in 2022, with 80m tonnes of the gas exported. By 2025 Qatar’s production capacity will be 110mtpa, rising to 126mtpa by 2027, a 64% increase on 2022 levels. Qatar Energy (QE) CEO, Saad Sherida Al-Kaabi, argues that the energy crisis generated [global] demand for LNG and its potential to deal with intermittent supply during the long-term energy transition. That transition will mean gas is needed for decades to come. It is a theme that Ingrams touches on too. “Gas demand is seen by most analysts to be growing out into the 2030s at least, and then to still stay very high in the 2040s and beyond.” In Ingrams’ opinion Europe’s “demonising” of the hydrocarbon sector risks “near term shortages and price spikes”. He added, “I would say that they (Qatari specialists) think the European strategy doesn't add up. They acknowledge that the EU is indeed going for decarbonisation, but that the way they want to get there is somewhat unrealistic.” That Europe’s decarbonisation plans were unrealistic was a theme that was discussed at an International Energy Agency conference in 2016, one year after the Paris accord, with H.E. Abdullah Bin Hamad Al-Attiyah, then the CEO of Qatar Petroleum (QP), on the podium and he was far more forthright. Al-Attiyah’s view at the time was that the EU 


decarbonisation plan was naïve and that the bloc’s climate goals are largely unachievable because western democracies have a tendency to over-promise to appease their electorate, and that has led to Qatar shifting its focus from Europe to the east for its long-term contracts. In Al-Attiyah’s view European politicians were not to be trusted, they could not meet climate change promises, but would eventually bend to the reality of the energy needs of their countries. “Politicians say one plus one is four minus two,” explained Al-Attiyah at the IEA, he went on to say that politicians attending COP meetings were effectively appeasing their constituents. “The title is nice, climate change, but inside [the meeting] there is no climate change, there is only interests,” he said pointing to the main driver for future energy needs. According to Al-Attiyah while Europe is divided on fossil fuels the US exports shale gas and coal to countries such as Germany while claiming green credentials. It is impossible to achieve the 20% decrease in global carbon emissions by 2030, because “no one will accept it” under these conditions, argues Al-Attiyah. “Politicians promise a lot,” he said, but they are not to be trusted before an election, all the promises made prior to the election will be forgotten, he claimed. Al-Attiyah went on to say, “There is no problem with the hydrocarbons vis-à-vis the climate change, but the problem is who will commit to it, to reduce the emissions. Even in Paris when they said Kyoto is expired and they said we will create a new road map, in my experience this way will take another 50 years, because n


o-one will [keep their] promise.” Such views are not isolated amongst the hydrocarbon knowledge elite, including Dr Salameh who said Al-Attiyah’s summation seven years ago was “absolutely correct” and still holds true today. “While Western green policies have some merit in aiming to reduce global emissions, they also have a dark and sinister side to them aiming to persuade oil and gas producers to keep their reserves underground for their [European governments’] own future use, but the world has seen through their policies.” As the economic and geopolitical landscapes have been transformed, Qatar has sought to consolidate its position as the world’s largest and most reliable exporter of LNG, said Dr Salameh. Crisis in the energy markets that began in Europe during 2021 meant that European economies were already susceptible to global challenges. Russia’s incursion into Ukraine has had a substantial and lasting effect on the global economy, whether through soaring grain prices or the impact on energy costs and availability. Qatar has been encouraged by the western allies to fill the gap left by sanctions on Russia. But the Middle Eastern Gulf state has managed to walk a political tight rope, adding to its new clients in Europe by cutting a deal with China for the supply of fuel over a 27-year period. Essentially Qatar had a very good year in 2022, sealing its NFE and NFS customer in China while also penning a contract with Germany. 


Copyright © 2023. All rights reserved. 


Seatrade, a trading name of Informa Markets (UK) Limited.


1 view0 comments

留言


bottom of page