Fuel and routing efficiency define air freight

Corridor-level conditions remain uneven across major air lanes

Air freight conditions remain broadly stable across most major routes, but are diverging by lane as the Iran conflict continues to play a role in usable capacity, global supplies of jet fuel, and timing reliability.

Longer routings around restricted airspace in the Middle East are beginning to influence aircraft utilization on some long-haul rotations. Higher fuel costs continue shaping rates across key Asia-origin markets, which are particularly dependent on crude oil from the Middle East to make jet fuel. Trans-Atlantic belly capacity is being added, but unevenly by gateway pair, reinforcing that usable cargo space remains lane-specific rather than uniform across the network.

Together, these signals point to a market where space remains accessible, but planning increasingly depends on routing, fuel surcharges, and lane-specific operating conditions.

Fuel-driven pricing shapes Asia‒Europe services

Across Asia‒Europe lanes, rates continue to reflect fuel surcharges and longer routings more than changes in underlying cargo demand. Rates from Hong Kong, Shanghai, and southeast Asia origins remain elevated relative to earlier in the year, although week-over-week rate movement has narrowed and schedule consistency has improved.

Capacity constraints remain linked primarily to aircraft availability and longer routings rather than fuel supply limitations. As a result, current rate firmness is being driven more by cost pressures than by demand strength.

For May planning, this distinction matters: stable or elevated rates do not necessarily indicate tightening demand conditions. Recent pricing trends instead point to a period of stabilization at higher cost levels, as underlying cost pressures remain in place.

Longer block times affecting Trans-Atlantic aircraft utilization

On Trans-Atlantic routes, airlines are increasingly taking longer paths to avoid restricted airspace, extending block times—the total time aircraft spend from departure gate to arrival gate. While these routing adjustments are beginning to affect aircraft utilization, the projected 3‒6% reduction in usable capacity has not materialized broadly and remains dependent on how much longer disruptions persist.

Freighter capacity deployed across the Trans-Atlantic remains largely stable, with only limited shifts toward higher-yield lanes visible at this stage.

At the same time, published schedules show early signs of additional belly capacity entering the market. Realization of the expected 5–8% expansion depends on passenger demand holding through the early summer travel period, meaning scheduled cargo space may increase even as routing inefficiencies affect capacity across selected rotations.

Contract renewals are beginning to show low single-digit increases, driven primarily by disruption-related cost pressures.

Indian subcontinent services normalize after Gulf disruption

Aircraft deployment across Indian subcontinent lanes are continuing to recover, approaching about two-thirds of the capacity available before the Iran conflict.

As financial year-end shipments subside and ocean-to-air conversions ease, additional capacity returning to the market is supporting a gradual moderation in Indian subcontinent–North America rates compared with earlier in the quarter. Connectivity through Middle East hubs continues to rebuild gradually, improving onward routing options into both Europe and North America, although schedule reliability remains dependent on rotation patterns at several key gateways.

Indian subcontinent‒Asia lanes remain comparatively open, supported by incremental capacity injections, with rates moving closer to pre-disruption ranges. In contrast, rate declines on Indian subcontinent‒Europe services have been more limited, as carriers continue prioritizing capacity allocation toward higher-yield North American sectors and other strategic long-haul routes.

Fuel exposure remains the principal sensitivity factor

For long-haul routes, fuel is the main factor influencing May's planning assumptions. Tankering remains a scenario risk on selected long-haul routes if crude oil and jet fuel exports from the Middle East remain blocked. Aircraft may tanker more fuel than they need for a flight to avoid buying fuel where it’s more expensive or the supply is less reliable. The additional fuel weight can reduce cargo payload and limit space relative to scheduled capacity.

Meanwhile, airlines are increasingly deploying more fuel-efficient aircraft on these routes as fuel costs and routing constraints play a larger role in fleet planning decisions. Freighter planes that consume less fuel are preferred, as they help manage fuel risks more effectively.

At this stage, these effects remain corridor-specific rather than systemwide, but they represent the most important variable to monitor if disruption risk expands further into the summer operating period.

Similar fuel-driven execution sensitivity is visible across surface transport markets, for more details visit the Diesel Fuel section of this report.

Planning ahead

• Build additional lead time into time-sensitive shipments. Longer routings and rotation variability may affect execution reliability even where space appears available.
• Validate routing options before committing to delivery windows. Preferred routings may shift by gateway, especially on Asia‒Europe, Trans-Atlantic, and Indian subcontinent‒North America lanes.
• Distinguish between cost-driven pricing and demand-driven tightening. Stable demand does not necessarily mean near-term rate relief if fuel surcharges remain elevated.
• Confirm whether belly capacity is available on the gateway pair needed. Planned passenger flight increases are not expected to translate evenly into additional cargo capacity across all Trans-Atlantic origin–destination pairs.
• Monitor payload feasibility on dense shipments. Increased tankering or prioritizing certain aircraft may make available space seem higher than it actually is for heavier or dense cargo.

Notable shifts this month

North America export capacity remains open but uneven by destination

The U.S. export market remains mostly accessible, although capacity into several destinations—including Australia, India, and the Middle East—has tightened.

Capacity to the Middle East remains fluid due to the ongoing military conflict across the region, while India services continue to face pressure from longer routings that reduce usable cargo payload. Australia is entering its typical winter seasonal capacity decline as passenger demand softens. Conditions across these lanes are best described as tight rather than critical, with advance planning and service-level selection remaining the most effective mitigation strategies for time-sensitive shipments.

Middle East connectivity continues to recover

Cargo demand across the Middle East is stabilizing as regional operations normalize and cargo flows return. While demand hasn’t fully reached earlier peaks, reinstated connectivity through major hubs is improving onward routing options into both Europe and North America and supporting more balanced rate conditions across the region.

South America export access remains gateway-specific

South America air freight rates remain elevated due to fuel surcharges. Demand has been supported by perishable exports, including Mother’s Day flower volumes from Colombia and Ecuador and seasonal seed shipments from Argentina, Chile, and Uruguay.

The main constraint continues to be access to capacity rather than overall aircraft availability. Exports from Brazil, particularly through São Paulo (GRU), are most affected. Standard-service backlogs of roughly five to seven days are being reported on some lanes, while priority services into North America continue at elevated rates.

Indian subcontinent‒Asia capacity remains comparatively open

The Indian subcontinent‒Asia market remains relatively open following recent capacity injections, with rates moving closer to pre-disruption ranges. Compared with Indian subcontinent‒North America lanes, where deployment restoration is still under way, supply-demand conditions in these corridors are more balanced.

Key takeaways

• Plan for destination-specific variability from U.S. export gateways. Capacity into Australia, India, and the Middle East remains tighter than the broader market even as overall space availability stays accessible.
• Keep track of Middle East routing alternatives. Reinstatement of connections through major hubs is supporting stronger onward connections into Europe and North America, though schedule consistency remains corridor dependent.
• Secure capacity early for Brazil-origin exports where gateway access remains the primary constraint. Standard-service backlogs—particularly via GRU—are pushing more time-sensitive shipments to priority services.
• Expect Indian subcontinent services to continue stabilizing. Conditions on North America lanes are easing, while Asia service remains more readily available following recent capacity additions.
• Watch fuel exposure closely as the primary network-wide variable. Tankering, surcharge adjustments, and aircraft economics remain key factors influencing usable capacity alongside scheduled capacity levels.

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