MALAYSIA: Record 2010 earnings for Asia-Pac carriers

Preliminary financial performance figures released recently by the Association of Asia Pacific Airlines (AAPA) showed that Asia Pacific-based carriers in aggregate reported a record US$9.5 billion in net profits in 2010, a major turnaround from US$1.7 billion in net losses suffered in the previous year. The strong results were underpinned by a resurgence of air […]


Preliminary financial performance figures released recently by the Association of Asia Pacific Airlines (AAPA) showed that Asia Pacific-based carriers in aggregate reported a record US$9.5 billion in net profits in 2010, a major turnaround from US$1.7 billion in net losses suffered in the previous year. The strong results were underpinned by a resurgence of air travel and air freight demand, along with operating efficiencies including record high load factors, APAA said. International cargo traffic, expressed in freight tonne kilometres, surged by 24 per cent while passenger traffic grew by 9.6 per cent. Combined revenues for Asia Pacific carriers reached US$147 billion, 30 per cent higher than the US$113 billion reported in 2009, with cargo revenues jumping 52 per cent to US$22 billion. Operating expenses increased by 18 per cent to US$134 billion, mainly due to a 28 per cent increase in fuel expenses to US$43 billion, the single biggest cost item. The share of fuel expenditure as a percentage of total operating costs rose to 32 per cent in 2010, from 29 per cent the previous year, as oil prices rose 29 per cent to an average of US$80 per barrel in 2010. Non-fuel expenditures grew by 13 per cent to US$91 billion, with overall staff costs rising 12 per cent. Commenting on the 2010 financial results AAPA director general, Andrew Herdman said: “Buoyed by a firm recovery in premium business travel and a very strong rebound in demand for air freight, Asia Pacific carriers saw a welcome return to profitability in 2010, after two years of heavy losses.” “Asia Pacific airlines led the industry recovery, reporting combined net profits of US$9.5 billion, reflecting a 6.4 per cent net margin, well above the industry average. At the same time, the region’s carriers are taking on a more active role in international aviation policy debates which will shape the future development of the industry as a key driver of social and economic development.” Looking ahead Herdman said: “The medium and long term prospects for Asia Pacific aviation remain very positive, but the immediate outlook is somewhat clouded by the sharp increase in oil prices this year, which may dampen the global economic recovery. The lingering effects of the Japanese earthquake are also still evident, although there are some early signs of a recovery in demand for travel to and from Japan.”