Cargo volumes continue to decline for Asia Pacific airlines

July 31, 2019: The air passenger demand for Asia Pacific airlines continues to grow at a moderate pace, while the cargo volumes continue to decline, reported the Association of Asia Pacific Airlines (AAPA) in the recently released June traffic figures.

The region’s airlines registered a 4.0 percent year-on-year increase in the number of international passengers carried to an aggregate total of 31 million for the month.

The passenger growth is driven by widespread availability of affordable air fares and resilient growth in regional economies.

On the other hand, air cargo markets weakened further with the fall in global new export orders. As a result, the region’s airlines recorded a 7.2 percent year-on-year fall in air cargo demand as measured in freight tonne kilometres (FTK) in June, marking the eighth consecutive month of declining volumes.

The average international freight load factor fell significantly, by 5.1 percentage points to 58.8 percent for the month, after accounting for a 1.0 percent increase in offered freight capacity.

During the first half of the year, Asian airlines saw an encouraging 4.7 percent year-on-year growth in passenger traffic. This growth was supported by strong leisure demand, which continued to outpace the global rate of economic expansion.

During the same period, prevailing weakness in international trade flows across regions continued to affect the air cargo demand. The air cargo demand recorded 6.2 percent year-on-year decline.

The association stated widening trade disputes and higher tariffs as the factors that continued to disrupt global supply chains.

Andrew Herdman, director general, AAPA said: “In the months ahead, the outlook for the region’s travel markets is broadly positive, with continued expansion in air passenger demand. On the other hand, with moderating global business optimism levels and the absence of significant progress in trade negotiations, air cargo demand is expected to remain weak. Overall, the region’s airlines will closely monitor changes to operating conditions, whilst managing business operations with the aim of sustaining profitability.”