Executive Summary
Global air freight entered late February with solid momentum, but the market tone changed sharply after the Middle East conflict disrupted key hub-and-spoke flows through Doha, Dubai, and Abu Dhabi. IATA reported January global demand up 5.6% YoY against 3.6% capacity growth, while Xeneta said February demand still rose 6% YoY, with dynamic load factor reaching 62% and average global spot rates up 5% YoY to USD 2.58/kg. Since early March, the main issue has shifted from demand strength to capacity shock, rerouting, and fuel inflation. On affected lanes, Reuters/Freightos reported spot spikes of up to 70%. Near term, the market is likely to stay firm-to-volatile, especially on Asia–Europe, South Asia–Europe, and Europe–Middle East corridors. Forwarders should expect higher procurement risk, shorter validity windows, and stronger airline yield discipline through April. (IATA)
Global Economic & Trade Context
The macro backdrop is mixed rather than outright weak. WTO’s March outlook still projects global merchandise trade growth of 1.9% in 2026, after 4.6% in 2025, but warns that a sustained Middle East energy shock could cut 2026 growth to 1.4%. The WTO also notes that services trade is exposed through higher transport costs and disrupted air and sea routes. (World Trade Organization)
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US trade policy remains a source of planning uncertainty. After the US Supreme Court struck down the earlier emergency tariff regime on 20 February, the administration moved to temporary global tariffs under a different legal basis, initially 10% and then signaling 15%. That keeps forwarders and shippers in a front-loading / wait-and-see cycle rather than a stable replenishment pattern. (Reuters)
Energy has become the immediate swing factor. Xeneta warned on 5 March that Brent had already moved above USD 80/bbl and could exceed USD 100/bbl if disruption worsened; Reuters reported Brent at USD 102.83/bbl on 24 March as supply-risk concerns persisted. Higher jet fuel and longer routings now matter more for air cargo pricing than broad demand softness. (Xeneta)
Air Freight Market Analysis
Market snapshot
| Indicator | Latest Signal | Source |
| Global CTK demand | +5.6% YoY in Jan 2026 | IATA |
| Global ACTK capacity | +3.6% YoY in Jan 2026 | IATA |
| Global cargo load factor | 45.1% in Jan 2026 | IATA |
| Xeneta Feb demand | +6% YoY | Xeneta |
| Xeneta Feb capacity | +4% YoY | Xeneta |
| Xeneta global spot rate | USD 2.58/kg, +5% YoY in Feb | Xeneta |
| South Asia–Europe spot | USD 4.37/kg, +70% since war start | Reuters/Freightos |
| South Asia–North America spot | USD 6.41/kg, +58% since war start | Reuters/Freightos |
| Europe–Middle East spot | USD 2.79/kg, +55% since war start | Reuters/Freightos |
Air freight news
Spot rates, capacity and demand
Before the March disruption, pricing had just started to stabilize. Xeneta said February produced the first monthly spot-rate increase since May 2025, helped by pre-Lunar New Year demand and tighter utilization. Corridor-wise, Europe–North America spot rates rose 21% YoY in February and Northeast Asia–North America rose 10% YoY. (Xeneta)
The conflict then changed the rate story. Xeneta said airspace closures and cancellations immediately removed 12% of global air cargo capacity, while Reuters cited analyst estimates as high as 22% during the initial shock. The effect has been strongest where Gulf hubs normally intermediate cargo between Asia, Europe and Africa. (Xeneta)
Carrier strategies
Carrier behavior is now clearly defensive and yield-focused:
- Network reallocation: Lufthansa shifted capacity away from suspended Middle East markets into stronger Asia and Africa demand flows. (Reuters)
- Selective restoration: Gulf carriers have resumed unevenly; Reuters reported Qatar Airways around 20% of normal capacity, Emirates around 75%, Etihad and Air Arabia near 50%, and flydubai roughly 33% as of 24 March. (Reuters)
- Especially the European Air Carriers suspended their operations into West Asia while other carriers, Silkway, for example already resumed their flight operations.
- Freighter/routing flexibility: Xeneta expects freighters to reroute via Central Asia, add technical stops, or shift to more direct Asia–Europe patterns where traffic rights allow. (Xeneta)
Demand drivers
Demand remains supported by semiconductors, high-value manufacturing and e-commerce, but in a less clean way than in 2025. Xeneta flagged weaker China-US air cargo demand under tariff pressure and said China-Europe volumes were more stable but lacked a normal pre-holiday surge. Air Cargo News also noted that IATA still sees e-commerce as a growth engine despite regulatory friction. (Xeneta)
Regional Insights (Deep Dive)
| Region | Main Trend | Biggest Bottleneck | Rate/flow Impact | Operational insight |
| North America | Import demand is softer in air cargo than Asia/Europe; January CTK for North American carriers was -0.5% YoY. | Trade-policy uncertainty and uneven Asia inbound flows. | Transatlantic pricing held firmer than transpacific; Europe–North America up 21% YoY in Feb. | Prioritize transatlantic commitments over ad hoc Asia-US assumptions. (IATA) |
| Europe | Demand remains relatively resilient; European carriers posted +6.9% YoY CTK in January. | Middle East rerouting and fuel cost inflation. | Strong upward pressure on Asia-Europe and Europe–Middle East lanes. | Build longer transit buffers and expect more fuel / security surcharges. (IATA) |
| Asia | Still the core growth engine; Asia-Pacific CTK was +7.8% YoY in January. | Reduced access to Gulf hub connectivity and tariff-related uncertainty for China-US. | Northeast Asia–North America firm; South Asia lanes spiked hardest in March. | Secure ex-India and Southeast Asia space earlier than usual. (IATA) |
| Middle East |
From growth leader to disruption epicenter. | Airspace closures and partial hub shutdowns in Doha/Dubai/Abu Dhabi. | Europe–Middle East spot up 55%; major backlogs for time-critical cargo. | Treat Gulf routings as recovery markets, not normalized hubs yet. (IATA) |
| South Africa | Benefiting marginally from traffic diversion and stronger Africa-linked growth; African carriers were +18.2% YoY in January. | Limited direct capacity and dependence on global network connections. | Rates firm as Europe/Asia cargo avoids Gulf connections where possible. | Book early for pharma/perishables; expect indirect routings to change weekly. (IATA) |
| South America | More stable than other regions; WTO still sees South America exports up 3.5% in 2026 baseline, while Brazil posted a USD 4.2bn February trade surplus. | Limited widebody cargo depth versus Asia/Europe. | Less direct rate shock, but some upside from diverted sourcing and resilient exports. | LATAM markets should stay comparatively functional, but capacity remains selective. |
Market Outlook & Strategic Recommendations
Next 1–3 months
Base case: the market stays firm and volatile through April. Demand is not collapsing, but available lift is structurally impaired on conflict-exposed routings, and fuel remains the main upside risk to rates. If Gulf operations normalize further, some March spikes should ease; if not, Asia–Europe and South Asia long-haul rates will remain elevated and highly tactical. (Xeneta)
Recommendations for forwarders and logistics managers
- Shorten buying cycles. Weekly or even intra-week re-pricing is justified on conflict-affected corridors. (Reuters)
- Diversify gateway strategy. Avoid overreliance on Gulf transfer points for Europe-Asia-Africa cargo until capacity restoration is broader. (Reuters)
- Protect premium cargo first. Pharma, semiconductors, aerospace parts and critical spares should get pre-booked allocations. Reuters has already reported disruption to perishables, aircraft parts and pharma flows. (Reuters)
- Watch tariff-driven demand shifts. The bigger risk is not only weaker China-US air cargo, but redistribution toward Europe, South America and Africa. (Xeneta)
- Model fuel and surcharge pass-through. In this market, procurement success will depend less on published base rates and more on managing ad hoc fuel, security and rerouting costs. (Reuters)
