MALAYSIA: Airline bodies warn early recovery still fragile

Government stimulus packages in major Asia-Pacific economies are driving production increases and fueling air cargo growth according to the most recent reports released by The International Air Transport Association (IATA) and Association of Asia-Pacific Airlines (AAPA). The region’s banking system is relatively strong and the region’s consumers are not as burdened by debt as those […]


Government stimulus packages in major Asia-Pacific economies are driving production increases and fueling air cargo growth according to the most recent reports released by The International Air Transport Association (IATA) and Association of Asia-Pacific Airlines (AAPA).

The region’s banking system is relatively strong and the region’s consumers are not as burdened by debt as those in Europe and the US, said IATA. But the association’s director general and CEO, Giovanni Bisignani warned that, “it is far too early to call this a recovery.”

The worst may be over in terms of the fall in demand, but yields continue to be a disaster and costs are rising. The airline industry remains firmly in the red with a fragile business environment.

Seasonally adjusted cargo capacity has edged up only slightly in the last two months while load factors have risen to pre-crisis levels which should help to correct the precipitous fall in yields.

Meanwhile, Kuala Lumpur-based AAPA, reported that Asiaís air carriers saw their strongest signs yet of recovery in the air cargo business with September showing the strongest volumes in nearly a year.

It noted that although September traffic, measured in freight tonne kilometers (FTKs) was still 6.5 per cent lower than a year ago, “this is the smallest shortfall so far this year,” said Andrew Herdman, AAPA director general. The average AAPA international cargo load factor in September rose by 3.4 percentage points to 68.7 per cent for the month, as carriers cut capacity by 11.2 per cent.