The Unprecedented Pandemic Boom
Between 2020 and 2022, the air cargo industry experienced a gold rush. With passenger flights grounded globally, the belly capacity that typically carries around half of all air freight vanished overnight. This created a severe capacity crunch just as demand
for time-sensitive goods skyrocketed. Urgent shipments of personal protective equipment (PPE), followed by a massive surge in e-commerce as consumers shopped from home, sent freight rates to record highs. Airlines that had dedicated freighter fleets, like Taiwan's EVA Air, were in a prime position. Many others converted passenger planes into temporary freighters, known as 'preighters', by stripping out seats to capitalize on the soaring demand. For a time, cargo wasn't just a secondary revenue stream; for many airlines, it was the primary lifeline keeping them solvent.
A Return to Normalcy
The market conditions of 2026 are vastly different. The widespread resumption of international passenger travel has reintroduced enormous amounts of belly cargo capacity into the system. This increase in supply has naturally put downward pressure on the record-high prices, or yields, that airlines were able to command during the pandemic. While global air cargo demand continues to grow, it's at a more sustainable, single-digit pace rather than the frantic scramble seen previously. According to the International Air Transport Association (IATA), while demand remains robust, the growth in capacity is now outpacing it, leading to a more competitive environment where pricing power shifts back toward shippers and freight forwarders. This normalization means airlines can no longer rely on sheer capacity shortages to guarantee profits; efficiency and strategy are now paramount.
EVA Air's Surprising AI Tailwind
EVA Air's recent performance offers a fascinating look at how to thrive in this new environment. While many expected cargo revenues to fall sharply from their pandemic peaks, EVA Air has shown remarkable resilience. In the first quarter of 2026, the airline's cargo revenue saw a year-over-year increase, a trend supported through the first half of the year. The secret? A massive, unexpected boom in demand for artificial intelligence (AI) hardware. The airline's president, Sun Chia-ming, recently stated that AI-related shipments now account for up to half of its cargo revenue. As Taiwan is a hub for manufacturing key AI components, EVA Air is perfectly positioned to capitalize on this wave. Tech companies are competing fiercely for cargo space to ship valuable AI servers and components, often booking charter flights and paying premium rates, which has helped insulate EVA Air from the broader market's price softening.
The New Competitive Edge: Artificial Intelligence
The headline's mention of 'AI Freight Share' points to a deeper industry trend. While demand for physical AI products is boosting EVA Air's bottom line, the use of AI in logistics operations is becoming the new frontier of competition. In a market with tighter margins, airlines are increasingly using AI and machine learning for everything from demand forecasting and dynamic pricing to optimizing how cargo is loaded onto a plane. These technologies allow carriers to predict customer behavior, adjust freight rates in real-time based on dozens of variables, and ensure every available kilogram of space is monetized. By analyzing historical data, market trends, and even geopolitical events, AI helps airlines reduce costly errors and enhance efficiency. For an airline like EVA Air, leveraging this technology is key to maintaining its market share and profitability as competition intensifies.
What This Means for India
These global shifts have direct implications for India's burgeoning economy. India's air cargo market is projected to grow robustly, with a CAGR expected to exceed 11% between 2026 and 2034. This growth is fueled by the 'Make in India' initiative, a booming e-commerce sector, and strong exports in pharmaceuticals and electronics—all industries that rely on time-sensitive air freight. The normalization of global freight rates is a welcome development for Indian exporters and importers, making international trade more predictable. Furthermore, the Indian government's focus on infrastructure through the National Air Cargo Policy, which includes building dedicated cargo terminals and investing in airport modernization, positions the country to better integrate with these evolving global supply chains. As airlines globally adopt AI for efficiency, Indian logistics firms and exporters will also benefit from more sophisticated and reliable shipping solutions.
