- European air cargo demand grew 4.3 percent in 2025, but growth was uneven, with trade flows shifting toward the Europe–Asia corridor while intra-European volumes softened and Asia–North America weakened.
- Rising regulatory and sustainability pressures, including the EU Deforestation Regulation and full ETS exposure from 2026, are increasing costs and complexity, forcing operators to balance demand growth against compliance burdens.
- Volatility in rates, capacity and geopolitics is accelerating the shift toward AI, automation and data-driven platforms, making digital tools essential for forecasting, visibility and flexible routing rather than optional add-ons.
The European air cargo market posted a resilient 4.3 percent year-on-year demand increase by October 2025, but that headline masks a deeper reconfiguration. The defining trend was the redirection of trade flows, with the Europe-Asia corridor becoming the world’s strongest major lane, surging 11.7 percent in October.
This spike was driven largely by “a pivot from Chinese e-commerce giants towards European consumers and the need to adapt supply chains amid global trade policy shifts.” In contrast, intra-European cargo volumes dipped slightly, underscoring the uneven distribution of growth across the continent.
Automation moves forward
On the operational side, Europe saw a mixed picture. While digitalisation continued to advance — including systems like Germany’s mandatory “Secure Release Order” for port containers – complexity increased elsewhere. “Operational procedures saw both simplification and complexity,” says Alexey Zotov, Managing Director of Air Cargo Green Capabilities S.a.r.l., part of ACN Group.
The regulatory horizon is adding new costs and risk. The EU Deforestation Regulation (EUDR), taking effect in January 2026, will require “extensive due diligence documentation for key commodities, risking customs holds for non-compliance.” Meanwhile, the EU Emissions Trading System (ETS) continues its phase-out of free allowances, directly impacting airline margins.
“The key will be balancing this demand against rising regulatory and sustainability costs,” Zotov notes, pointing to growing pressure on operators to absorb or offset compliance-related burdens.
Growth goes global
Globally, 2025 defied gloomy expectations with projected three to four percent growth in air cargo demand. Africa led regional performance with 16.6 percent growth in October, while Asia-Pacific recorded 8.3 percent, buoyed by “high-value tech and AI-related shipments.”
North America was the weak link. US policy changes – including “high tariffs and the removal of the de minimis exemption for low-value packages” – contributed to a six-month contraction on the crucial Asia-North America corridor. This pushed carriers to shift capacity and supply chains to more stable regions.
“Freighters were reallocated, and production moved to Southeast Asia and India,” explains Zotov. As a result, “lanes like Middle East-Asia and Within Asia saw near double-digit growth as supply chains adapted.”
But volatility brought complications. Spot rates globally were down six percent year-on-year in early December, but “specific lanes like China-U.S. saw rates spike to their highest annual level.” In response, shippers grew cautious. “This uncertainty made shippers wary, leading to a preference for shorter, 6-month contracts over long-term commitments to maintain flexibility.”
“Freighter utilisation remained high, particularly for perishables… and on growing corridors like Africa-Asia.” However, dedicated freighter availability saw “sharp double-digit declines” from mid-year — a shift partially absorbed by returning passenger bellyhold capacity, particularly on transatlantic routes.
This mismatch caused rate pressure in some regions. Despite growing demand, the influx of bellyhold capacity generally kept global spot rates under downward pressure. But as the peak season arrived, “space on key lanes like Asia-Europe and Asia-US tightened, driving rates up by mid-to-high single digits.”
AI and automation shift from nice-to-have to must-have
Infrastructure strain also persisted – congestion at major hubs and weather events (like Super Typhoon Ragasa) continued to challenge reliable transit times. Against this backdrop, digital tools moved from convenience to necessity. AI-powered platforms for booking, document automation (like data extraction from bills of lading), and real-time visibility became operational necessities, moving from ‘nice-to-have’ to core infrastructure for agile decision-making.
“From 2026, EU airlines will have to account for 100 percent of their emissions under the ETS, increasing costs and incentivising investment in Sustainable Aviation Fuel (SAF) and fuel-efficient aircraft.” As Zotov puts it: “Environmental costs will become a permanent part of freight pricing.”
Another cost headwind looms in e-commerce. New EU customs fees on low-value packages from 2026 may dampen volumes, putting pressure on a sector that has propped up air cargo demand since the pandemic.
Geopolitical shifts are also quietly changing modal dynamics. “A gradual return of ocean shipping to the Suez Canal may recapture some cargo that shifted to air due to longer sea transits.”
“The volatility of recent years has proven that flexibility is paramount. Success will depend on leveraging AI for forecasting, maintaining diversified sourcing and routing strategies, and using data-driven platforms for end-to-end visibility and agile mode switching.”
From 2026, EU carriers will face full ETS exposure, with no free emissions allowances – a structural cost that reshapes margins, not just for airlines but across the chain. For carriers, that means accelerating investment in SAF and fuel efficiency. Forwarders will need to re-price services more dynamically and help shippers navigate compliance complexity. And for shippers: environmental costs are no longer an externality – they’re baked into the freight bill.
