AAPA: Steady recovery in passenger demand; air cargo markets on the wane

Preliminary May 2023 traffic figures released by the Association of Asia Pacific Airlines (AAPA) showed that international passenger markets continue to grow strongly amid the restoration of flights in the region. The region’s carriers registered a 193.2% year-on-year increase in the number of international passengers carried to 21.4 million in May. As a percentage of the corresponding month in 2019, demand averaged 68.5%. As measured in revenue passenger kilometres (RPK), demand climbed 162.5%, outpacing the 142.6% expansion in available seat capacity. As a result, the average international passenger load factor increased by 5.9 percentage points to 77.9% for the month. On the other hand, subdued demand conditions, driven by weak business confidence levels adversely impacted air cargo markets. In freight tonne kilometres (FTK) terms, air cargo demand fell by 7.0% year-on-year in May. Offered capacity rose by 6.0%, leading to an 8.5 percentage point decline in the average international freight load factor to 60.1% for the month. Commenting on the results, Subhas Menon, AAPA Director General said, “Strong travel appetite continued to spur recovery in passenger demand which grew by nearly three times in May, with both premium and leisure segments on the rise. Air cargo demand remained soft, reflecting the prevailing weak global economic conditions and in particular, the slowdown in the manufacturing sector.” Looking ahead, Menon said, “Trade tensions are likely to weigh down on cargo markets for some time to come whereas air travel demand is expected to demonstrate resilience in spite of the headwinds in the external environment. Overall, the outlook for the airlines remains positive, with the recent moderation in oil prices providing some relief to operating expenditure even though the industry will continue to face inflationary cost pressures. Against this background, the region’s airlines are focusing their attention on disciplined cost management throughout the business while maintaining excellent safety and customer service standards.” For Editorial Inquiries Contact: Editor Matt Driskill at [email protected] For Advertising Inquiries Contact: Head of Sales Kay Rolland at [email protected]