AAPA: Sustained air passenger demand, but air cargo weakness persists

Association of Asia-Pacific
Andrew Herdman, now the outgoing director general of the AAPA, at an earlier Assembly of Presidents. (PHOTO: AAPA)

AAPA: Sustained air passenger demand, but air cargo weakness persists

Preliminary traffic figures for the month of July released today (27 August) by the Association of Asia Pacific Airlines (AAPA) showed that international air passenger demand continued to grow moderately, supported by business and leisure related travel. However, falling exports and a worsening trade outlook led to further weakness in air cargo markets.

The number of international passengers carried by the region’s airlines climbed 3.4 percent higher year-on-year to a combined 32.5 million, even as business sentiment continued to deteriorate in the face of rising headwinds to global growth. Demand in revenue passenger kilometres (RPK) rose by 2.7 percent year-on-year, underscoring the relative strength of regional travel markets. A matching 2.7 percent expansion in available seat capacity led to an average international passenger load factor of 82.4 percent for the month, unchanged compared to the same month last year.

Mounting trade tensions, alongside deteriorating business confidence levels contributed to further declines in orders for goods. Against this backdrop, the region’s airlines registered a 7.7 percent fall in air cargo demand as measured in freight tonne kilometres (FTK) in July. The markedly lower demand, coupled with almost flat expansion in offered freight capacity, by 0.4 percent, led to a 5.2 percentage point decline in the average international freight load factor, to 58.9 percent for the month.

Andrew Herdman, AAPA’s director general said: “During the first seven months of the year, the number of international passengers carried by Asian airlines grew by 4.6 percent to a combined 219 million supported by the availability of competitive airfares and expanding networks. In addition, sustained expansion in major Asian emerging and developing economies fuelled the appetite for international travel.”

“By contrast, however, global trade conditions deteriorated further, as higher tariffs disrupted global supply chains, and Asian airlines saw international air cargo demand fall by 6.2 percent during the first seven months of the year. The weakness in air cargo markets is likely to extend into the coming months, unless we see some meaningful progress in trade negotiations.”

Looking ahead,  Herdman said: “The outlook for air passenger travel demand is still broadly positive, but with growth slowing, the region’s airlines are facing an increasingly challenging operating environment.”

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Matthew Driskill is the Editor of Asian Aviation and is based in Cambodia. He has been an Asia-based journalist and content producer since 1990 for outlets including Reuters and the International Herald Tribune/New York Times and is a former president of the Foreign Correspondents Club of Hong Kong. He frequently appears on international broadcast outlets like CNN, Al Jazeera and the BBC and has taught journalism at Hong Kong University and the American University of Paris. Driskill has received awards from the Associated Press for Investigative Reporting and Business Writing and in 1989 was named the John J. McCloy Fellow by the Graduate School of Journalism at Columbia University in New York where he earned his Master's Degree.


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