- Air cargo recorded stronger-than-expected growth in 2025, driven by shifting trade lanes and geopolitical disruption, according to IATA Director General Willie Walsh.
- While Asia-Pacific led global cargo growth, demand patterns diverged sharply between key routes, highlighting ongoing volatility.
- Looking ahead to 2026, IATA forecasts slower but still positive airfreight growth, alongside persistent supply-chain constraints, rising maintenance costs, and mounting sustainability pressures.
- Walsh warned that thin industry margins, delayed aircraft deliveries, and high SAF prices will continue to challenge airlines, reinforcing the need for coordinated action on CORSIA, fuel transition, and operational resilience.
Air cargo delivered stronger-than-anticipated growth in 2025, buoyed by geopolitical disruption and shifting trade flows, yet industry leaders are warning of a more measured expansion in 2026 as structural pressures weigh on performance.
According to IATA Director General Willie Walsh, global cargo demand rose 3.4 percent in 2025—significantly outperforming earlier projections. The gains, however, masked pronounced volatility across key trade lanes and underscored how geopolitical realignment is reshaping freight markets more rapidly than passenger networks.
While the combined Asia–North America and Asia–Europe corridors continue to account for more than half of global air cargo volumes, 2025 marked a notable divergence. Traffic between Asia and North America declined by 0.8 percent, representing the first contraction in several years. In contrast, Europe–Asia volumes surged by 10.3 percent, reflecting evolving sourcing strategies, trade rebalancing and supply chain recalibration.
The Asia-Pacific region remained the principal growth engine, recording an 8.4 percent increase in cargo traffic in 2025. Looking ahead, IATA forecasts global airfreight growth to moderate to 2.4 percent in 2026, with Asia-Pacific again leading at 6 percent.
“Cargo grew by 3.4 percent, significantly stronger than our early forecasts for the year,” Walsh said. “The impact of geopolitical change was much more obvious on the air cargo side of the business than on the passenger side.”
He noted that the divergence between Asia–North America and Asia–Europe flows highlights the sensitivity of freight markets to trade policy shifts, regional instability and evolving manufacturing footprints.
Fragile Profitability Amid Rising Costs
Despite a projected USD 41 billion in industry-wide net profits in 2026, Walsh cautioned that airline margins remain thin, limiting the sector’s ability to absorb mounting cost pressures. For cargo operators, the financial environment is particularly complex.
Persistent supply chain disruption—most notably aircraft delivery delays—continues to constrain capacity planning and fleet renewal. Airlines have been forced to extend the operational life of older aircraft, driving up maintenance expenditure and fuel consumption. IATA estimates that supply chain inefficiencies have added more than USD 11 billion in costs across the industry, with direct implications for cargo reliability, emissions performance and long-term capital allocation.
For freight carriers operating dedicated fleets, delayed deliveries also translate into deferred efficiency gains and slower progress toward decarbonisation targets.
Sustainability and SAF Cost Pressures
Sustainability remains central to the industry’s strategic agenda. Walsh reiterated IATA’s support for the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) as the single global market-based mechanism to address aviation CO₂ emissions. Compliance costs are expected to total approximately USD 60 billion by 2035, representing a significant financial commitment that Walsh argued must be matched by consistent government backing.
However, progress on sustainable aviation fuel (SAF) remains uneven. Global SAF production reached 1.9 million tonnes in 2025—equivalent to just 0.6 percent of total jet fuel consumption. Mandates in several markets have driven SAF prices to more than double those of conventional jet fuel, and in some cases as much as four times higher.
For the air cargo sector, which relies heavily on long-haul widebody operations, this price differential presents a material commercial challenge. Elevated fuel costs directly impact yields and network economics, particularly in a demand environment characterised by slowing growth.
Resilience Under Pressure
Walsh concluded that air cargo continues to demonstrate resilience and strategic importance within global supply chains. However, sustaining profitable growth will depend on stabilising aerospace supply chains, accelerating SAF production at commercially viable price points, and preserving global alignment on emissions frameworks.
As 2026 approaches, the industry faces a delicate balancing act: maintaining operational agility amid geopolitical uncertainty while investing in fleet modernisation and decarbonisation under increasingly constrained financial conditions. For cargo carriers and logistics partners alike, disciplined capacity management and coordinated policy engagement will be critical to navigating the next phase of the cycle.
