AAPA: Business confidence lifts cargo, border restrictions suppress pax travel demand

Airlines around the world, including Cathay, had to ground thousands of planes at the height of the COVID-19 pandemic. (PHOTO: Shutterstock)

Preliminary June 2021 traffic figures released by the Association of Asia-Pacific Airlines (AAPA) showed that international passenger demand remained suppressed by ongoing tight border restrictions. Across the Asia-Pacific region, many countries recorded a surge in COVID-19 transmissions caused by new variants, with limited vaccine supplies hampering vaccination progress.

The region’s airlines carried only 1.4 million international passengers in June, just 4.4 percent of the 32 million carried in the corresponding month in 2019. With available seat capacity at 12.9 percent of pre-pandemic levels, the average international passenger load factor of 31 percent recorded in June was a 51 percentage point drop from that of the corresponding month in 2019, underscoring the significant challenges faced by airlines in the passenger segment, which normally accounts for a significant portion of total airline revenue.

Meanwhile, air cargo markets remained resilient, supported by improved business confidence in the advanced economies, in particular, the United States and Europe. Accordingly, international air cargo demand as measured in freight tonne kilometres (FTK) grew by 25.7 percent year-on-year, with volumes matching the same month in 2019. Offered freight capacity saw an 11.7 percent year-on-year increase, leading to an 8.2 percentage point jump in the average international freight load factor to 73.3 percent for the month.

Because Singapore Airlines has no domestic network, its Changi Airport base is still almost a ghost town in 2021. A lone student waits to say goodbye to a friend in a nearly deserted departure hall. (PHOTO: Matt Driskill)

“The already dire situation has recently been compounded by new COVID-19 infections across the region due to the Delta variant, with ongoing border restrictions holding back any meaningful restart in international travel markets. Air cargo traffic growth, supported by strong demand for both intermediate and consumer goods from the major advanced economies, remains the saving grace,” said Subhas Menon, AAPA director general. “Many Asian economies are facing renewed challenges in bringing the pandemic under control and in progressing vaccination roll-outs. Prospects for an early recovery for Asian airlines are dim unless cohesive action is taken by governments to accelerate vaccination roll-outs and reopen borders safely based on ICAO and WHO guidelines.”

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