Asia Pacific airlines see continued traffic growth and return to profitability
Asia Pacific full-service airlines have reported continuing pick-up in passenger travel and cargo demand in 2010 with Association of Asia Pacific Airlines (AAPA) commenting that Sep-2010 traffic results "indicate that market conditions in the region's international passenger and freight markets remained robust as the economic recovery gained momentum".
AAPA Director General Andrew Herdmann said: "Asian economies have been leading the way out of the global downturn and this has resulted in a tremendous boost to the fortunes of carriers across the region. Asian carriers have responded to these increases in demand with disciplined capacity and yield management, which has generally been rewarded by a welcome return to profitability, following two very difficult years for the industry."
AAPA traffic highlights for Sep-2010
|
|
Sep-2010 |
% Change |
|---|---|---|
|
Passengers (000s) |
15,239 |
+13.4% |
|
Traffic (RPKs) (mill) |
58,735 |
+9.3% |
|
Capacity (ASKs) (mill) |
74,352 |
+6.6% |
|
Passenger load factor (%) |
79.0% |
+1.9 ppts |
|
Cargo traffic (FTKs) (mill) |
5,434 |
+18.5% |
|
Freight capacity (FATKs) |
8,005 |
+19.3% |
|
Freight load factor (%) |
67.9% |
-0.5 ppts |
AAPA airlines record 11th month of growth
In the latest month of data, AAPA members carried 15.2 million international passengers, a 13.4% year-on-year increase, boosted by particularly strong demand on regional routes. It marks the 11th consecutive month of traffic growth and the fifth consecutive month of double-digit growth. The growth in Sep-2010 follows a 0.2% reduction in Sep-2009 which was preceded by a 8.8% contraction in Sep-2008. Passenger numbers in Sep-2007 increased 5.7%.
AAPA passenger numbers growth and passenger load factor: Sep-2008 to Sep-2010
Centre for Asia Pacific Aviation & AAPA
Overall international passenger traffic (RPKs) carried by Asia Pacific airlines increased 9.3% outpacing a 6.6% capacity (ASKs) expansion which was the highest rate of year-on-year capacity growth since prior to Jan-2007. The capacity growth in the month came off a 6.1% contraction in Sep-2009.
AAPA RPK growth and ASK growth: Sep-2008 to Sep-2010
Centre for Asia Pacific Aviation & AAPA
As a result of this demand-supply balance, load factors increased 1.9 ppts to 79.0% for the 14th consecutive month of load factor growth.
AAPA PLF growth: Sep-2008 to Sep-2010
Centre for Asia Pacific Aviation & AAPA
In the nine months ended Sep-2010, AAPA carriers have witnessed a 14.6% increase in passenger numbers and an even more dramatic 39.2% increase in international air cargo traffic.
AAPA traffic highlights for nine months ended Sep-2010
|
|
Jan-2010 to Sep-2010 |
% Change |
|---|---|---|
|
Passengers (000s) |
137,971 |
+14.6% |
|
Traffic (RPKs) (mill) |
522,751 |
+11.1% |
|
Capacity (ASKs) (mill) |
662,572 |
+3.3% |
|
Passenger load factor (%) |
78.9% |
+5.5 ppts |
|
Cargo traffic (FTKs) (mill) |
47.709 |
+30.2% |
|
Freight capacity (FATKs) |
68,079 |
+17.4% |
|
Freight load factor (%) |
70.1% |
+6.9 ppts |
Double-digit freight growth
International air cargo demand (FTKs) for Asia Pacific airlines increased 18.5% year-on-year with freight capacity (FTKs) increasing 19.3% resulting in a 0.5 ppt decline in average cargo load factors to 67.9%.
AAPA FTK growth and FATK growth: Sep-2008 to Sep-2010
Centre for Asia Pacific Aviation & AAPA
Outlook 'very positive' for Asian carriers
2010 has been a much-improved year for Asian carriers which have witnessed an amazingly rapid recovery from the lows of 2008 and 2009 when carriers were forced to rigorously cut capacity, aggressively reduce costs and severely discount fares to simulate demand, resulting in yield pressures, lower revenues and heavy losses for most carriers in the region.
According to IATA, Asia Pacific airlines reported combined net losses of USD7.4 billion over 2008 and 2009, with a loss of USD4.7 billion in 2008 and USD2.7 billion. But what a difference a year can make: the region's airlines are now anticipated to be the most profitable in 2010 with a net profit of USD5.2 billion forecast and USD3 billion in 2011.
IATA Asia Pacific EBIT margin (%) and net profit outlook
|
Region |
2007 |
2008 |
2009 |
2010F |
2011F |
|---|---|---|---|---|---|
|
EBIT margin (%) |
2.9% |
-4.7% |
0.0% |
6.3% |
3.8% |
|
Net profit (bill) |
3.0 |
-4.7 |
-2.7 |
5.2 |
3.0 |
|
Net profit (bill) including exceptional items |
3.0 |
-8.7 |
-2.6 |
5.2 |
3.0 |
The Asia Pacific aviation industry has benefited from strong economic and demand growth in markets such as China and India. AAPA stated: "Asian consumers are already displaying confidence in the future. At the same time, a broad pickup in business sentiment is evident in the marked recovery in demand for premium-class seats, a segment of the market in which Asian carriers have traditionally excelled."