Air capacity constraints keep rates elevated

Air freight markets are regaining stability following the reopening of Middle East airspace, but pricing and capacity conditions remain far from balanced.

The immediate disruption may have eased, yet the market is now operating within tighter structural limits that continue to support elevated rates.

While networks have been largely restored and flight frequencies are improving, capacity is not returning quickly enough to match demand. This imbalance is keeping pressure on pricing across key trade lanes, particularly between Asia and Europe.

Rather than a sharp correction, the market is transitioning into a more controlled but still constrained environment.

Capacity recovery is uneven

The restoration of Gulf hubs has improved connectivity, particularly for Asia-Europe flows that rely heavily on transhipment through the region. However, the earlier loss of capacity has created knock-on effects that are still working their way through the system.

Aircraft availability does not always translate into usable cargo space. Longer routings, airspace restrictions in certain corridors, and operational inefficiencies continue to reduce effective capacity.

Although freighter supply has improved and some lanes are nearing pre-disruption levels, overall growth in capacity still lags behind demand trends seen over the past two years.

Rates remain resilient

Despite additional capacity entering the market, pricing has shown only limited softening.

Air freight rates remain significantly higher than last year, with Asia-Europe lanes still well above historical norms. Even where short-term fluctuations occur, the broader supply-demand balance remains tight enough to prevent any sustained downward movement.

This reflects a market driven less by surging demand and more by structural constraints on available capacity.

Demand is steady and strategic

Cargo volumes are growing at a measured pace, broadly aligned with global economic activity. However, demand from specific sectors continues to play a critical role in supporting the market.

Technology supply chains, semiconductors, AI infrastructure, and high-value electronics are maintaining consistent volume flows. At the same time, shifts in e-commerce patterns are redistributing cargo across trade lanes, adding further complexity.

With limited spare capacity, even moderate increases in demand are enough to sustain current rate levels.

Fuel costs still shape the market

The easing of geopolitical tensions has brought some relief to energy markets, with jet fuel prices declining from recent highs. This has translated into modest reductions in fuel surcharges.

However, fuel costs remain significantly elevated compared to last year and continue to represent a major component of air freight pricing. In addition, pricing adjustments often lag underlying fuel movements, prolonging cost pressure for shippers.

The air freight market is no longer in crisis mode, but it has reset to a higher operating baseline.

Capacity constraints, steady demand, and persistent cost pressures mean that rates are likely to remain elevated even as conditions stabilise further. The focus for supply chains is shifting from short-term disruption management to long-term optimisation.

Logicall supports customers with proactive air freight planning, capacity assurance, and real-time market insight to help manage cost and maintain service reliability.

If your air freight strategy needs to adapt to tighter capacity and sustained pricing pressure, speak to Logicall to secure space and optimise your supply chain performance.