Air cargo market declines in March as Gulf disruption hits demand

Global air cargo demand declined in March 2026, with cargo tonne-kilometres (CTK) falling 4.8% year-on-year, as disruption in the Middle East, seasonal effects and rising costs combined to create a highly challenging operating environment, according to the latest monthly analysis.

International cargo traffic fell more sharply, down 5.5% year-on-year, reflecting the disproportionate impact of network disruption on cross-border freight. Airlines were forced to reroute around restricted airspace, resulting in longer transit times, reduced efficiency and weaker demand on key corridors linked to Gulf connectivity.

The Middle East emerged as the primary drag on global performance, with CTK contracting by 54.3% year-on-year. The sharp decline reflected a breakdown in hub connectivity and reduced aircraft utilisation, removing a significant volume of cargo capacity from the global system and outweighing gains in other regions.

Outside the Middle East, regional performance was mixed but relatively resilient. Africa recorded the strongest growth at 7.0%, supported by bypass traffic as cargo flows were redirected away from disrupted Gulf routes. Asia Pacific, Europe, and Latin America and the Caribbean also posted modest gains, although these were insufficient to offset the scale of contraction in the Middle East. North America, meanwhile, slipped slightly into decline, reflecting weaker transatlantic demand.

At the route level, performance diverged sharply between corridors benefiting from rerouting and those exposed to disruption. Europe–Asia remained the strongest major lane, expanding 14.2% year-on-year and continuing a multi-year growth streak. Within Asia also showed resilience with 7.5% growth, supported by regional manufacturing and trade flows. In contrast, Gulf-linked corridors recorded severe declines, with Middle East–Asia down 58.6% and Europe–Middle East falling 57.6%, highlighting the extent of disruption to traditional transit networks.

Cargo type performance also showed clear differences. Dedicated freighters proved more resilient, with volumes declining only 0.9% year-on-year as operators redirected capacity to alternative routes and maintained schedule reliability. In contrast, passenger belly cargo dropped by 12.1%, reflecting reduced flight frequencies and weaker connectivity as airlines adjusted networks around restricted airspace.

Industry capacity, measured in available cargo tonne-kilometres (ACTK), declined by 4.7% year-on-year, broadly in line with demand. Capacity reductions were concentrated in the Middle East and Africa due to operational constraints, while Asia Pacific, Europe, and Latin America increased capacity through rerouting and targeted deployment. However, these increases could not compensate for the sharp contraction in Gulf operations.

Despite falling demand and capacity, the global cargo load factor remained stable at 47.9%. This stability masked significant regional divergence, with stronger utilisation in Africa and Asia Pacific balanced by weaker performance in the Middle East and a normalisation trend in North America following last year’s elevated demand levels.

Energy market volatility added further pressure to the sector. Jet fuel prices surged 106.6% year-on-year, reaching their highest level in more than 23 years, while Brent crude rose 43.1%. The sharp increase in fuel costs pushed cargo yields higher, with rates rising 13.6% year-on-year to 2.75 USD per kilogram, creating a distinctly inflationary pricing environment driven by supply constraints, longer routings and reduced maritime reliability.

Macroeconomic indicators pointed to underlying resilience despite weakening momentum. Global manufacturing activity remained in expansion territory, with the output index at 51.4 and new export orders at 50.1, indicating continued but marginal growth. Industrial production and global trade also expanded, although both showed signs of moderation, suggesting a cooling in forward demand conditions rather than a downturn.

Overall, the March 2026 air cargo market reflected a combination of cyclical softness and structural disruption. While rerouting supported some regions and corridors, the loss of Gulf connectivity, rising costs and shifting trade flows reshaped global freight networks, resulting in uneven performance across regions and cargo segments.