Asia Pacific carriers’ profits free-fall 55%
Asia Pacific airlines recorded US$2.5 billion in combined net earnings in 2013, a 55 per cent fall compared to the $5.6 billion reported for the year 2012, according to the latest figures from the Association of Asia Pacific Airlines (AAPA).
June 1, 2014
Asia Pacific airlines recorded US$2.5 billion in combined net earnings in 2013, a 55 per cent fall compared to the $5.6 billion reported for the year 2012, according to the latest figures from the Association of Asia Pacific Airlines (AAPA). Profitability succumbed to widespread yield pressures arising from stiff market competition and lacklustre air cargo demand, the AAPA said in a statement.
Operating revenue for the region’s carriers totalled $171.2 billion, 2.1 per cent less than the US$174.9 billion achieved in 2012. Passenger revenue fell by 2.2 per cent to $131.4 billion, driven by a fall in yields which more than offset the increase in traffic demand. Cargo revenue declined by 4.6 per cent to $20.2 billion, caused by persistently soft global trading conditions which in turn affected demand for air freighted goods manufactured in Asia.
During the year 2013, international passenger traffic, in revenue passenger kilometre terms, grew by an encouraging 6.3 per cent, whereas international air cargo traffic measured in freight tonne kilometres saw a 1.2 per cent decline.
Commenting on the 2013 financial results, Andrew Herdman, AAPA director general said: “Overall, Asia Pacific airlines faced challenging conditions in 2013 and registered a net profit margin of just 1.5 per cent, compared with the 3.2 per cent margin achieved in 2012. Intense competition in both the passenger and air cargo business segments led to pressure on fares and weaker Asian currencies adversely affected costs, even more so for airlines with significant exposure to foreign denominated debt.”