Supply chain crisis, export demand for consumer goods buoys Asia Pacific airlines: AAPA

Preliminary traffic results for the full calendar year 2021 released earlier this week by the Association of Asia Pacific Airlines (AAPA) showed continued decimation in international air passenger demand for the region's airlines, as tight border restrictions implemented in response to the prolonged COVID-19 pandemic dashed hopes of recovery in air travel markets.

Overall, the 16.7 million international passengers carried in the year 2021 represented just 4.4% of the volumes recorded in pre-pandemic 2019, whilst offered seat capacity averaged 13.8% of the levels registered in 2019.

On the other hand, international air cargo markets saw encouraging growth over the course of the year. With major manufacturing hubs located in the region, Asia Pacific airlines benefitted from buoyant export demand for consumer and intermediate goods. In addition, supply chain bottlenecks at container shipping ports boosted demand for shipments by air.

For the full year 2021, international air cargo demand as measured in freight tonne kilometres (FTK) registered a robust 20.1% year-on-year increase, after posting a 15.4% annual decline in the year 2020 when the widening spread of the COVID-19 pandemic severely curbed economic growth across the world.

Compared to the growth in demand, offered freight capacity expanded at a markedly slower pace of 8.1% in 2021, as the drastically reduced international passenger operations adversely affected belly-hold cargo capacity, although this was partly mitigated by the deployment of cargo-only passenger flights and increased freighter operations.

As a result, the international freight load factor climbed 7.4 percentage points to 74.3%, the highest annual average on record. Commenting on the results, Subhas Menon, AAPA Director General said, "For a second year running international passenger travel remained severely suppressed, as a result of strict border measures imposed throughout the region and elsewhere. It is the worst crisis the region's airlines have ever faced in terms of duration and depth."

He added, "The air cargo business segment has been a silver lining for the aviation industry, with strong demand helping to partially mitigate the loss in passenger revenue. In FTK terms, international air cargo demand for the year 2021 has recovered to just above pre-crisis levels." Headquartered in Kuala Lumpur, AAPA is the trade association for scheduled international airlines based in the Asia Pacific region.