![At a recent conference, the IATA's Andrew Matters said "what we’ve seen more recently is moderation [of demand], back to something more sustainable."](https://martav.shop/wp-content/uploads/2025/05/atlasplane.jpg?w=910&h=511&crop=1)
Air cargo demand for 2025 is going to fall short of initial expectations, one industry body says.
Although the International Air Transport Association (IATA) said in December that it expected air cargo demand to grow by 6 percent in 2025, the lobbying group representing 340 airlines is scaling back those projections.
“A 6 percent growth forecast for 2025 will not be what you see in two weeks’ time,” said Andrew Matters, director of sustainability and economics at the IATA, to delegates at the CNS Partnership Conference in Miami on Wednesday.
Related Stories
That number already was a big step down from the 11.3 percent increase in cargo tonne-kilometers (CTKs) measured by IATA in 2024. That percentage was largely boosted by the flurry of e-commerce packages that flooded the U.S. throughout the year, as well as capacity restrictions in ocean shipping tied to the Red Sea crisis.
Thus far in 2025, numbers haven’t reflected that 6 percent growth would be in reach.
Global air cargo demand increased 4.4 percent year over year in March, according to last month’s IATA data. This followed a 0.1 percent demand contraction in February, the first such decline in demand since July 2023. Kicking off the year, January saw demand inch up 3.2 percent,
IATA expects to reveal its updated projection for air cargo’s annual growth at its annual general meeting in New Delhi from June 1-3.
“If you go back not too long ago, we were running at a double-digit growth rate which peaked at about 14 percent. Now, as everybody here knows, a growth rate of double digits is not sustainable,” said Matters at the conference. “We’ve talked about all that has happened since then and, unsurprisingly, what we’ve seen more recently is moderation, back to something more sustainable.”
President Donald Trump’s 145-percent tariffs on Chinese goods had started to do a number on air cargo demand by April, furthering the decline. Before the tariffs were scaled back for 90 days, e-commerce air cargo shipments in late April from China to the U.S. dropped roughly 50 percent from the two-week period the year prior, according to freight forwarder Dimerco. Multiple Chinese air carriers had been canceling freighter services before the tariff situation changed.
IATA hasn’t released its April figures yet, but they are expected to reflect the same headwinds.
“Given the downside risks to the outlook that have increased substantially, and the downgrades to global economic activity, I think you can appreciate the direction forecasts are going to go when we see some new numbers,” Matters said.
The IATA’s initial forecasts also called for cargo yields to remain stable in 2025, as capacity constraints were initially projected to counteract the impact of falling jet fuel prices.
Thus far, Matters said yields “are a bit lower than in the past couple of years” for the first few months of 2025.
In the first two months of the year, air cargo yields sank. They dropped 9 percent month over month in January, before falling again 6.1 percent sequentially in February. At the time, this was a 12-month low in air freight rates. Yields bounced back up 6.6 percent in March, likely as front-loading ahead of the tariffs crunched capacity and drove a monthly cargo demand rebound.
The 90-day tariff reduction may help with getting a short-term spike in air cargo demand, capacity and rates. The global Baltic Air Freight Index calculated by air freight rate market data platform TAC Index gained 1.5 percent in the week to May 12, likely due to the cancellations ahead of Monday’s announcement to scale back the duties.
Judah Levine, head of research at Freightos, observed in a Tuesday weekly update that the tariff relief may entice some e-commerce volumes back to air cargo as it reduces the duty burden on low-value goods. But don’t expect the massive bullwhip effect of cargo that is occurring out at sea.
“With the interim agreement keeping de minimis eligibility suspended for Chinese goods, and with formal entry filing costs often exceeding the value of many e-commerce shipments, it seems unlikely that this 90-day pause will have as strong an effect on air cargo as it may on ocean freight,” Levine said.
Despite the downgraded outlook amid the geopolitical uncertainty, the IATA’s Matters said the fundamentals for air cargo remain the same as they did in December.
“We now have this disruption that we have to overlay on top of those forecasts, and that’s going to bring changes,” said Matters. “Fundamentally, we started this year as an industry in good shape, with a positive outlook, and a lot of those factors remain to this day.”
