The Association of Asia Pacific Airlines (AAPA) released preliminary 2024 financial performance figures for its members today, 11th July.
The initial report shows that carriers throughout the region earned US$7.3 billion in combined net profits in 2024, supported by strong growth in passenger traffic and a marked recovery in cargo volumes.
This was despite needing to deal with a challenging operating environment due to ongoing supply chain constraints and rising operating costs.
The year that was
In 2024, robust growth in business and leisure travel both within the region and globally resulted in a 19.9 percent increase in system-wide passenger demand, in revenue passenger kilometer (RPK) terms.
Meanwhile, a surge in e-commerce activity and disruptions to maritime shipping contributed to a solid 13.9 percent increase in international air cargo demand, as measured in freight tonne kilometres (FTK), following two consecutive years in decline.
Asia Pacific airlines recorded a 7.7 percent increase in operating revenue, reaching a combined total of US$213.9 billion in 2024, compared to US$198.6 billion in 2023.
Aggregated passenger revenue rose by 8.8 percent to US$170.4 billion, while cargo revenue climbed by 10.3 percent to US$23.2 billion.
Robust traffic growth more than offset the impact of a 9.2 percent decline in passenger yields to 8.0 US cents per RPK, and a 3.2 percent decline in air cargo yields to 32.7 US cents per FTK.
Combined operating expenses rose by 8.4 percent to US$199.8 billion for the year, due mainly to a 10.1 percent increase in non-fuel expenditure to US$138.9 billion.
Persistent supply chain challenges, including shortages of spare parts, aircraft delivery delays and aircraft groundings due to engine issues, drove up maintenance and leasing costs.
Likewise, inflationary pressures also contributed to higher staff expenditure and airport charges.
Meanwhile, fuel expenditures were up 4.8 percent to US$60.8 billion, in tandem with an increase in flights operated.
The increase was partly mitigated by a 13.4 percent decline in jet fuel prices to an average of US$98.1 per barrel in 2024.
The share of fuel expenditure as a percentage of total operating costs averaged 30.5%, down from 31.5 percent in 2023.
A year of resilience
AAPA director-general Subhas Menon said of 2024’s overall performance: “2024 was a year of remarkable resilience for Asia Pacific airlines, as carriers confronted multiple challenges while achieving strong growth in both passenger and cargo demand, along with record passenger load factors. However, airlines were not immune to cost pressures. The marked increase in operating expenses, particularly non-fuel costs, underscored the impact of supply chain constraints. Despite this, Asia Pacific airlines demonstrated their adaptability, delivering operating margins of 6.6 percent for the year, just 0.6 percentage points under the 7.2 percent in 2023.”
With regard to his forecast, Menon pointed out how the region’s carriers continue to face considerable headwinds, including elevated operating costs and ongoing supply chain disruptions.
He added that geopolitical tensions may lead to renewed volatility in oil and currency markets while air cargo markets may soften further, as uncertainties over trade negotiations dampen demand for air shipments.
Despite this, he expressed optimism with regard to air passenger and cargo demand owing to numerous factors.
Menon said: “Air passenger demand is expected to remain relatively resilient, amidst continued growth in the region’s economies. In response, airlines are actively refining their business strategies, maintaining cost discipline while pursuing new revenue streams. At the same time, carriers are investing in fleet modernisation, digital innovation, and enhanced service offerings to deliver a high-quality travel experience.”
