Asia Pacific airlines see growth in passenger markets, soft cargo demand

Preliminary traffic figures released on Wednesday by the Association of Asia Pacific Airlines (AAPA) showed that international air passenger markets remained busy in January 2020, with demand supported by travel ahead of the Lunar New Year celebrations, even as the novel coronavirus (COVID-19) outbreak in China began to spread.

International air cargo volumes in January were soft in part due to the closure of factories in Asia for the holiday season.

Overall, 33.8 million international passengers were carried by the region's airlines, representing a 2.7 per cent increase compared to the same month last year.

In revenue passenger kilometres (RPK) terms, demand grew by 3.3 per cent while available seat capacity expanded by 4.2 per cent, leading to a 0.7 percentage point fall in the average international passenger load factor to 81.7 per cent for the month.

 

Meanwhile, international air cargo demand as measured in freight tonne kilometres (FTK) fell by 4 per cent year-on-year in January, whereas offered freight capacity grew by 2.7 per cent. As a result, the average international freight load factor declined by 3.7 percentage points to 53 per cent for the month.

"The year started on a positive note with further growth in demand for air travel recorded in January," said AAPA Director General Andrew Herdman.

"However, the renewed optimism was short-lived as we are now in uncharted territory with the COVID-19 outbreak having had a very significant economic and social impact, leading to sharp falls in China-related traffic and wider effects on Asia Pacific travel and tourism markets, as well as severely disrupting global manufacturing supply chains."

Airlines have responded to the sharp falls in demand by reducing the number of flights operated across route networks while striving to maintain international connectivity.

The proliferation of uncoordinated travel advisories and border restrictions imposed by governments while well-intentioned are inconsistent with WHO recommendations and International Health Regulations, and only serve to amplify public concern, said Herdman.

Overall, airlines continue to monitor developments closely while taking appropriate measures to ensure the safety and well-being of passengers and staff members. From a business perspective, the impact of reduced demand is expected to lead to billions of dollars in lost revenue, mainly suffered by Chinese carriers and other Asia Pacific airlines.

"Airlines are therefore focusing closely on making associated cost reductions and conserving cash resources in order to survive the current downturn while remaining ready to respond positively as and when the situation shows signs of improvement," said Herdman.

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