Cargo demand grew by 3.4 percent in 2025, outperforming early forecasts and reflecting how geopolitical shifts are now felt more acutely on the cargo side of the industry than in passenger markets. While combined Asia–North America and Asia–Europe lanes account for more than 50 percent of global air cargo volumes, 2025 marked a notable divergence: volumes between Asia and North America declined by 0.8 percent, the first contraction seen in years, while Europe–Asia cargo surged by 10.3 percent.
The Asia-Pacific region remained the strongest performer, with cargo traffic growing 8.4 percent in 2025. Looking ahead, IATA forecasts global cargo growth of 2.4 percent in 2026, with Asia-Pacific again leading at 6 percent, underlining the region’s role as the engine of airfreight demand.
“Cargo grew by 3.4 percent which was significantly stronger than our early forecasts for the year. And I think the impact of geopolitical change was much more obvious on the air cargo side of the business than on the passenger side. And just looking at the major air cargo trade lanes, Asia to North America and Asia to Europe, which combined represent more than 50 percent of air cargo volumes, we saw a significant reduction in cargo between Asia and North America, down by 0.8 percent.”
Walsh stressed that profitability remains fragile. Despite industry-wide net profits forecast at USD 41 billion in 2026, margins remain thin, limiting airlines’ ability to absorb rising costs. Supply chain disruption continues to weigh heavily on cargo operators, particularly through aircraft delivery delays that have forced airlines to operate older fleets for longer. IATA estimates these disruptions have added more than USD 11 billion in costs, driven largely by higher fuel burn and maintenance requirements—factors that directly affect cargo capacity, reliability, and emissions performance.
Sustainability was a central theme of the address. Walsh reaffirmed support for CORSIA as the single global market-based mechanism for addressing aviation CO₂ emissions, noting that compliance is expected to cost the airline industry around USD 60 billion by 2035. He argued that these funds represent a significant opportunity to finance climate action globally, provided governments continue to support the framework.
Progress on sustainable aviation fuel (SAF), however, remains insufficient. Global SAF production reached 1.9 million tonnes in 2025, accounting for just 0.6 percent of total jet fuel consumption. Mandates, Walsh noted, have driven prices higher—often more than double fossil jet fuel—and in some markets up to four times higher, dampening voluntary demand and slowing output growth. For air cargo, which depends heavily on long-haul operations, this cost gap poses a particular challenge.
Walsh concluded that while air cargo continues to demonstrate resilience and strategic value, the industry’s ability to deliver sustainable growth will depend on stabilising supply chains, expanding SAF availability at competitive prices, and maintaining global alignment on emissions policy.
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Author: Anastasiya Simsek
