Underpinned by a surprisingly robust recovery in international trade, air cargo demand, as measured in freight tonne kilometres, recorded a 33.1 per cent increase in March compared to the slump last year. Freight capacity grew by a more restrained 12.6 per cent. As a result, the average international air cargo load factor for Asia Pacific carriers jumped 11.3 percentage points to reach 73.1 per cent.
Overall these same carriers transported 15.6 million international passengers in March, a growth of 14.8 per cent compared to the same month last year. International passenger traffic, measured in revenue passenger kilometres, rose by 14.2 per cent while available seat capacity grew by a relatively modest 2 per cent. As a result, the average passenger load factor reached a new high of 80.1 per cent, 8.6 percentage points above the levels seen one year ago.
“These figures provide further confirmation that the global economic recovery is well underway, led by quicker growth in leading Asia Pacific economies, but also accompanied by welcome signs of a pickup in both business and consumer confidence in major developed markets,†said AAPA director general Andrew Herdman.
“The international air cargo market has bounced back strongly from last year’s slump in international trade, recording a 33.8 per cent jump in cargo volumes compared to the same period last year. Both passenger and cargo traffic volumes are close to returning to levels last achieved before the recession began, which to hit hard in mid-2008. Meanwhile, careful management of capacity has helped improve asset utilisation, and has been a key factor in steering airlines back towards profitability after two years of heavy losses.â€Â
Preliminary financial performance figures also indicate that Asia Pacificbased carriers reported significantly lower aggregate losses in the 2009 calendar year. Net losses for 2009 totalled US$2 billion, compared to aggregate losses of US$8.8 billion recorded in 2008. Declining revenues as a result of weak traffic demand and falling yields were partially offset by lower fuel prices and effective cost control measures, according to AAPA.
Combined revenues for Asia Pacific carriers totalled US$114.2 billion, 16.1 per cent lower than the US$136.1 billion reported in 2008. Operating expenses fell by 19.8 per cent to US$112.1 billion. Fuel expenses, the single largest cost item, declined by 34.9 per cent to US$32.2 billion, with an average oil price of US$62 per barrel compared to US$97 per barrel in 2008.
Fuel accounted for 29 per cent of total operating costs, compared to 35 per cent in 2008 while non-fuel expenditures fell 11.6 per cent to US$80.0 billion as a result of reductions in staff costs, rationalisation of unprofitable routes and some deferrals of new aircraft deliveries. A number of carriers also benefited from favourable currency exchange movements and reversals of previous mark-to-market fuel hedging losses.
As a result of the global recession, international air freight and passenger demand fell for two consecutive years. International air cargo traffic expressed in freight tonne kilometres, suffered a decline of 10 per cent for the year reflecting the slump in international trade. The fall in revenues was exacerbated by lower average passenger fares and shipping rates in a generally weak market.
“The downturn in global economic activity over the past two years has had a very severe impact on the aviation industry. Asia Pacific carriers were particularly hard hit by the sharp declines seen in the premium business travel and air freight markets,†Herdman said.
“Airlines reacted appropriately by moving quickly to adjust capacity, and introducing a range of measures to restrain costs throughout the business. As a result, they were able to offset much of the impact of lower revenues, reducing the level of aggregate losses for Asian airlines to US$2 billion in 2009, representing a negative 2 per cent margin on combined revenues of US$114.2 billion.â€Â
Turning to the outlook, Herdman commented, “Economic conditions showed welcome signs of improvement in the latter part of 2009, with a rebound in international trade and renewed consumer and business confidence, led by strong growth in the Asia Pacific region. Positive sentiment has been maintained into the first quarter of 2010, and both cargo and passenger demand are close to returning to the levels seen before the recession.â€Â
Looking ahead, Herdman said: “Provided the current momentum is sustained, Asia Pacific airlines are poised to spearhead the recovery in the aviation industry, with an anticipated further improvement in financial performance for the year 2010 following two years of heavy losses.â€Â