Regional demand buoys Asian airlines
Regional demand has led another month of growth in passenger revenues among Asia Pacific carriers, but a slump in the cargo market is weighing on airline balance sheets.
Commenting on the latest results, Andrew Herdman, Director General of the Association of Asia Pacific Airlines (AAPA) said; “The first four months of this year saw a solid 8.7% increase in the number of international passengers carried by Asian airlines, led by robust growth on short haul regional routes.”
Airlines based in the Asia Pacific region carried 17.2 million international passengers in April, a 12.2% increase compared to the same month last year. In revenue passenger kilometre (RPK) terms, international passenger demand grew by 10.1%, reflecting significantly stronger demand on regional routes. With traffic growth outpacing an 8.5% increase in available seat capacity, the average international passenger load factor was 76.3%, 1.1 percentage points higher than in the same month last year.
Profit margins have suffered however, from another month of weak cargo demand, with negative growth outpacing airline’s attempts to cut cargo capacity.
In April, international air cargo traffic, measured in freight tonne kilometres (FTK), registered a 7.6% decline compared to the same month last year. Even with a 4.8% reduction in offered freight capacity, the average international air cargo load factor fell by 2.0 percentage points, to 66.3% for the month.
Herdman said; “We’re still seeing welcome growth in passenger demand, but airline profit margins have suffered as a result of the weak cargo market, and the impact of stubbornly high oil prices. Although key Asian economies are still performing relatively well, the operating environment remains challenging, clouded by uncertainties over prospects for the global economy.”