Global air cargo markets experienced a sharp contraction in the week ending March 8, according to data from WorldACD. Overall volumes declined -4% week-over-week and -12% year-over-year, indicating the widening impact of Middle East airspace restrictions and subsequent re-routing of traffic flows. These disruptions continue to constrain capacity across key trade lanes, particularly those with connections to the Gulf.

The Middle East & South Asia (MESA) region has seen the most severe decline. Origin cargo from MESA fell 36%, against a -42% drop in available capacity. WorldACD’s analysis highlighted that the Gulf region was hit hardest, with outbound tonnage collapsing -62% week-over-week alongside a -70% cut in capacity, while inbound chargeable weight declined by -47%.

According to a TAC report, the capacity reduction is due to Gulf-based carriers such as Emirates, Etihad, and Qatar Airways being key providers of global air cargo. Their sudden withdrawal has created a shock to the market and had “an immediate impact on capacity, particularly for Asia-Europe cargo, about 50% of which typically goes via the Gulf, but also for wider global supply chains.” The resulting tightness in capacity is now pushing airfreight rates higher across multiple regions.

Compounding this, recent attacks on oil and gas infrastructure in the Gulf have disrupted global energy flows, triggering an increase in jet fuel prices that is pushing operating costs higher. Air Cargo Week reported that the rising fuel surcharges have not yet been fully passed through to current airfreight prices. This suggests that further rate increases are likely.

WorldACD also warned that cost pressures will remain even if the U.S.-Israeli conflict with Iran de-escalates and Middle Eastern airline operations show further recovery. The analyst noted that airlines have already introduced price hikes, driven by a 58% week-over-week surge in jet fuel costs and higher war risk insurance premiums. “A number of airlines have already announced fare increases in their passenger operations as a result of the sharp escalation in the price of jet fuel, and a jump in war-risk insurance premiums is bound to add upward momentum to pricing,” WorldACD stated.

Source: WorldACD, TAC