Air Cargo Market: Analysis By Type (Air Mail and Air Freight), By Services (Express and Regular), By End User, By Destination (Domestic and International), By Region Size and Trends and Forecast up to 2028

The air cargo market ecosystem involves the physical as well as the documentary movement of freight from the origin (forwarder) to the destination (consignee), usually using a specialized cargo aircraft or the belly space of passenger aircraft. The global air cargo market value stood at US$181.54 billion in 2022, and is expected to reach US$255.63 billion by 2028.

Air cargo refers to the movement of goods, equipment or consignments such as raw materials, finished goods, valuables, perishables, chemicals, electronics, pharmaceuticals, etc., through charter or commercial air carriers, using air transportation networks and infrastructure. Air cargo market plays a vital role in meeting the urgent and time-sensitive transportation needs of various industries, including manufacturing, retail, healthcare, and e-commerce, by offering speed and reliability, and allowing businesses to transport goods over long distances in a relatively short time frame.

According to IATA, global CTKs is expected to increase by 1.5% year on year (YoY) in august 2023. Global air cargo market demonstrated a consistent growth, primarily driven by rising need to transport high-value & time-sensitive products by just-in-time manufacturers, increasing international distribution of electronic goods, and growing need to transport temperature-sensitive products by pharmaceutical sector. Increasing digitalization, positive shift in consumer preferences towards online shopping, rapidly expanding end user industries, and increasing utilization of air freight to deliver both non-perishable goods, such as clothing, jewelry, and perishable items, including fruits, vegetables, meats, etc., have been positively contributing to the increasing demand of air cargo services. Also, rapidly expanding aviation industry, surging prevalence of the consolidated airfreight service, and rising import and export of goods among numerous countries worldwide, is expected to boost the growth of overall air cargo market in the forecasted period of 2023-2028.

Market Segmentation Analysis:

By Type: The report provides the bifurcation of the air cargo market into two segments based on type: air mail and air freight. Air freight cargo is the largest and fastest growing segment of global air cargo market owing to enhanced tracking and visibility provided by air cargo services, ongoing technological advancements in aircraft and cargo handling systems, rapidly growing emerging markets in regions like Asia, Africa, and Latin America, increasing globalization of trade, growing requirement for cold-chain handling, escalating demand for fast-delivery services, and enhanced flexibility in the range of options provided by freight companies at competitive pricing, including express, standard, and deferred services.

By Services: The report provides the bifurcation of the air cargo market into two segments on the basis of services: regular and express. Regular air cargo is the largest segment of global air cargo market, owing to increasing air freight fleets across different regions, rising focus of operators on implementing collaboration and aircraft lease strategies to lease cargo aircraft models to serve customers, increase in online shopping, growing demand from industries like automotive, aerospace, pharmaceuticals, electronics, etc., dynamic nature of global trade, and added advantages offered by regular cargo services in terms of efficient handling of bulk cargo, flexibility in choosing routing options to optimize customer’s supply chain, availability of multiple service providers, reduced congestion, and cost predictability.

By Destination: The report provides the bifurcation of the air cargo market into two segments on the basis of destination: domestic and international. Domestic air cargo is the fastest growing segment of global air cargo market owing to significant demand for fast & reliable domestic shipping services by e-commerce companies, rapid expansion of regional markets, increasing adoption of just in time inventory management by many businesses to reduce storage costs and improve efficiency, ongoing technology advancements in tracking and logistics sector, and increasing government investment in airport infrastructure.

By End User: The report provides the bifurcation of the air cargo market into six segments on the basis of end user: pharmaceuticals and healthcare, food and beverage, consumer electronics, retail, automotive, and others. Pharmaceuticals & healthcare is the largest and fastest growing segment of global air cargo market, driven by increasing penetration of retail pharmacies, large transportation of pharmaceutical products, rapid industrialization and rapidly growing international trade, growing requirement of cold-chain handling services by biopharmaceutical companies, and strict temperature and time sensitive requirements of chemical and pharmaceutical products, especially for emergency medical supplies or clinical trial materials.

By Region: The report provides insight into air cargo market based on the regions namely, Europe, North America, Asia Pacific, Latin America and Middle East and Africa. Asia Pacific air cargo market is the largest and fastest growing region of global air cargo market owing to rising manufacturing and trade activities, rapid economic growth, increasing consumer demand for convenient products, increasing digitalization, growing purchasing power of middle class consumers, and increased establishment of trade agreement & free trade zones in Asia Pacific region encouraging international trade and investments. Huge air cargo opportunity in rapidly growing airports of Southeast Asian countries such as Singapore, Thailand, Hong Kong, Indonesia, etc., positively expanding tourism and travel sector, increased presence of vast domestic & regional air network, and ongoing development of airport infrastructure, is expected to exhibit huge opportunity for air cargo vendors in Southeast Asian countries during the forecast period of 2023-2028. Asia Pacific air cargo market is divided into five segments on the basis of region, namely, China, Japan, India, South Korea, and rest of Asia Pacific, where china air cargo market is the largest segment of Asia pacific air cargo market owing to, rising e-commerce & online retailing activity, presence of technologically advanced manufacturing sector, growing demand for air cargo services in chemical and pharmaceutical industries, and establishment of free trade zones and logistics hubs in cities like Shanghai and Shenzhen.

Market Dynamics:

Growth Drivers: The global air cargo market has been rapidly growing over the past few years, due to factors such as rapidly expanding airline industry, growing e-commerce sector, increase in international trade, rising need to transport high-value and time-sensitive products, surging demand for fast-delivery services, etc. Rising disposable income, increased internet penetration and a positive shift in consumer’s preference towards online shopping has been positively contributing towards an increase in e-commerce activities, boosting the demand for air cargo services and aircrafts needed by e-commerce companies for efficient delivery of goods across domestic and international borders while also meeting tight delivery windows of time-sensitive shipments, such as same-day and next-day delivery items. Also, with growing need for efficient air transportation by major companies and organizations to expand their operations and source materials, components, and finished products from various countries, there has been a surge in the number of airlines and airports investing in expanding and improving their air cargo infrastructure, in terms of constructing new cargo terminals, purchasing more cargo aircraft, and improving ground handling facilities, to meet the growing need for faster and safer air transportation of cargo.

Challenges: However, the global air cargo market growth would be negatively impacted by various challenges such as market uncertainty, presence of cheaper alternatives, etc. Air cargo market is characterized by a high degree of fluctuations and uncertainty, with the industry being highly susceptible to economic fluctuations, changes in consumer demand, and global events (e.g., pandemics, political conflicts), all of which create significant fluctuations in shipping volumes and revenue.

Trends: The market is projected to grow at a fast pace during the forecasted period, due to increasing adoption of blockchain technology, escalating focus on supply chain optimization, growing emphasis on reduction of perishable product waste and spoilage, ongoing technological advancements, increasing focus on sustainability, etc. The escalating use of robotics, internet of things, artificial intelligence (AI), automated systems, deep learning, big data, and augmented & virtual reality technologies, across numerous operations in air cargo industry to improve operational efficiency and transparency of air cargo transportation, is expected to accelerate the growth of global air cargo market in the forecasted period of 2023-2028.

Impact Analysis of COVID-19 and Way Forward:

COVID-19 brought in many changes in the world in terms of reduced productivity, loss of life, business closures, closing down of factories and organizations, and shift to an online mode of work. Though COVID-19 pandemic had staggering impact on the aviation industry as a whole, the air cargo segment within the market experienced higher-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden outbreak of COVID-19 was associated with increase in increase in demand for freight services and solutions needed by healthcare facilities, government institutions, and chemical and pharmaceutical industries for large transportation of medical and pharmaceutical products including PPE kits, COVID-19 vaccines, essential medical supplies, personal protective equipment, & life-saving medical equipment, etc. across countries through a well-established temperature-sensitive distribution system. Therefore, the overall impact of COVID-19 pandemic on global air cargo market turned out to be positive.

Competitive Landscape:

The global air cargo market is relatively fragmented with increasing number of airlines and cargo operators offering services globally, and accounting for the majority of market revenue.

The key players of the air cargo market are:

• Cathay Pacific Airways Limited
• Deutsche Post DHL Group
• The Lufthansa Group
• FedEx Corporation
• Korean Air Lines Co., Ltd.
• United Parcel Service of America, Inc. (UPS)
• The ANA Group (ANA Holdings Inc.)
• The Emirates Group
• Qatar Airways Group Q.C.S.C.
• Turkish Airlines Inc.
• United Airlines, Inc.
• Singapore Airlines Limited
• Atlas Air Worldwide Holdings, Inc.
• Cargolux Airlines International S.A.
• China Airlines

Major companies in the market have been implementing both organic (such as launches, expansion, and product approvals) and inorganic development strategies (such as product launches, partnerships, and collaborations) to expand their product portfolio and gain larger market share. Also, the global air cargo market is witnessing a steady increase in research and development (R&D) initiatives as well as investments resulting in improved technology and a better supply chain in the market. For instance, on September 01, 2023, Korean Air launched a program to use sustainable aviation fuel (SAF) for air cargo operations in cooperation with air cargo customers and forwarders, where customers can make customized contributions through the Korean Air Cargo SAF program and reduce their carbon footprint.