Preliminary financial performance figures released today by the Association of Asia Pacific Airlines (AAPA) revealed despite slower growth in air cargo demand – cargo revenue increased by 11.5 per cent to US$21.2 billion.
AAPA also reported a 8.9 per cent increase in cargo yields last year to 27.1 US cents per freight tonne kilometres (FTK). FTKs slowed to a 2.2 per cent increase for the year, which AAPA said was due to “uncertainties stemming from unresolved international trade disputes adversely affected business confidence and levels of export activity”.
Overall, the aggregated net earnings of Asia Pacific airlines halved in 2018 to a combined $4.7 billion, from the $9.6 billion recorded in the previous year.
Collectively, the region’s carriers achieved operating revenues totaling $204.7 billion in 2018, a 10.4 per cent increase compared to the $185.4 billion registered in the previous year. Operating expenses grew by 12.5 per cent to an aggregate total of $194.6 billion in 2018. This was driven by a significant 27.5 per cent rise in fuel costs to $54.5 billion.
AAPA said continued expansion in the global economy underpinned further growth in air passenger and air cargo markets, but airlines faced an increasingly challenging operating environment marked by significantly higher jet fuel prices, adverse currency movements and rising pressures on non-fuel cost items.
Looking ahead, AAPA director general, Andrew Herdman said: “Asia Pacific airlines continue to face significant headwinds in the form of persistent cost pressures, stiff competition as well as further volatility in oil and currency markets.
“Whilst air passenger markets remain relatively resilient, the weak sentiment surrounding air cargo markets is a warning signal that trade disputes are doing real damage to the economy and could further undermine global growth prospects going forward.
“Undaunted, Asia Pacific carriers continue to evolve, adapting to a dynamic marketplace. Airlines are continuously reviewing their business plans, implementing measures to improve efficiency and carefully managing costs whilst seeking opportunities to maximise revenue.
“In addition, the region’s airlines remain at the forefront of industry developments, launching new services and investing continuously in new technologies with the aim of providing passengers with high levels of customer service and a seamless travel experience.”