Europe & Middle East Air Market Monthly Report

Executive Summary

1. In August, the Europe and Middle East air cargo markets showed a “weak volume, firm price” pattern, with demand recovering for the first time since early June — signaling that the downturn may be bottoming out.

2. Rates were broadly flat but remained elevated. Yitongda International’s actual transaction data show Europe-bound rates generally fell back except for direct FRA services, consistent with weakening European import demand.

3. The Middle East capacity gap remains a structural constraint, with Gulf-region capacity still about 17% below pre-war levels.

4. European hubs suffered widespread delays, driven not only by geopolitical airspace restrictions over the Middle East but also by strikes, air traffic control failures, summer storms and staffing shortfalls within Europe.

5. September rates are expected to keep oscillating at high levels, while volumes continue to stabilize on a low base.

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Core Data Snapshot

In August, the Europe & Middle East air cargo market as a whole showed a pattern of “weak volumes, stable prices and regional divergence”. The overall picture across four dimensions:

· Rates: In a range of “month-on-month stabilization at high year-on-year levels”. By contrast, Yitongda International’s actual bookings: Shanghai-origin direct FRA rose MoM (+6.5%), all other lanes generally retreated, and the three Middle East lanes fell 10.3%–11.0% MoM.

· Demand: The first monthly recovery since early June, showing bottoming signals; Middle East-to-US cargo value +25%, while volumes to Europe −6%.

· Capacity: European network capacity +3.0% YoY, though widespread delays occurred; Gulf-region capacity remains 16%–17% below pre-war levels.

· Load factor: European carriers CTK +4.4%, CLF 51.1% (highest globally); Middle East carriers CTK +1.7%, CLF 44.1%.

The August air freight index was “broadly flat and soft”; the moves can be summarized as follows:

· Europe lanes stayed weak while FRA rose against the trend: July Europe-lane rates had already dropped about −8.8% MoM; in August all lanes except direct FRA continued to ease or held flat — a continuation of the trend, with only a structural rebound.

—— Seasonally, August remains peak summer travel season; the recovery of belly capacity kept Europe-lane supply loose and the supply-demand balance unreversed.

—— On policy and trade demand, following the EU’s removal of the low-value import duty exemption in July, e-commerce parcel volumes plunged, with no demand-side repair in sight.

· Middle East rates kept retreating from highs: July already showed a “high-then-low” profile with monthly averages of roughly −10% to −15% MoM; August fell a further −10.3% to −11.0%.

——  The Middle East capacity gap narrowed versus July, adjusting to −16% to −17% in August; the recovery pace improved at the margin but remains a structural constraint.

· Fuel costs reversed year-on-year and kept rising month-on-month: 

—— July +15.2% MoM / −9.1% YoY; August +8.2% MoM / +74.2% YoY. Cost-side pressure increased markedly versus July, providing floor support for September rates. 

GUSC - Average Actual Booking Rates

On Europe lanes, PVG-origin rates showed a pattern of “FRA direct rising alone while the rest broadly eased”. FRA direct averaged CNY 28.5/kg in August, up 6.5% from July — the only rising Europe lane; LHR direct, AMS direct and several transit lanes declined MoM, with MXP transit (−20.8%) and MAD transit (−16.5%) posting the steepest drops.

Figure 1 · GUSC— actual transacted average rates on key Europe-bound lanes from PVG, August 2026

 

 

On Middle East lanes, DOH transit averaged CNY 34.5/kg, still the highest across all lanes; DXB transit held relatively steady at CNY 26.0/kg; the three Middle East lanes fell 10.3%–11.0% MoM, showing that despite the persisting capacity gap, spot prices have retreated from their April highs.

Figure 2 · GUSC— actual transacted average rates on key Middle East-bound lanes from PVG, August 2026

 

August Capacity Dynamics

European hub operations were anything but smooth

Four large-scale disruption events were recorded in August, affecting more than 9,500 flights in total. Beyond geopolitical airspace restrictions over the Middle East, strikes, air traffic control (ATC) failures, summer storms and staffing shortfalls within Europe drove the hub delays.

Recovery progress of the three major Middle East carriers

Airspace security and geopolitical risks

Geopolitical conflict reignited in late August: the US strike on rocket-launcher sites on Iran’s Larak Island on August 30 (the first direct action in over a month) and Iran’s launch of eight ballistic missiles toward Jordan on August 31, among other events, led to restricted or even prohibited operations across multiple regions.

August Demand: A Three-Way Pattern of “Europe Under Pressure, Middle East Diverging, Intra-Asia Resilient”

Policy Impacts on Air Cargo in August

September Outlook

Rates are expected to keep “oscillating at high levels with slight month-on-month pressure”:

· Europe lanes: YoY still at a high of 15%–20%; MoM slightly pressured by the tail of peak season and soft volumes — forecast −3% to +2%.

· Middle East lanes: the capacity gap is expected to narrow from 16%–17% to 12%–15%; the geopolitical premium keeps rates at relatively high levels. Should Strait of Hormuz transit be disrupted, one-sided upside risk exists.

· Cost side: the global average jet fuel price jumped to about US$171/barrel in early September; costs pass through into September, providing floor support.