Asian airlines will be cutting capacity and capex in 2009 - AAPA


Asia Pacific's flag carriers will be adopting strategies to conserve cash in an "extremely difficult" environment next year. The Director General of the Association of Asia Pacific Airlines (AAPA), Andrew Herdman, stated while the recent plunge in oil prices provides a "measure of relief", the challenging market conditions will force airlines to adopt additional cost-saving measures, "including capacity cutbacks and deferral of planned capital expenditures".

AAPA international passenger traffic continued to slide in Nov-08, with the number of international passengers carried by AAPA member airlines falling 9.8%, to 10.9 million in Nov-08.

AAPA international passenger numbers growth (% year-on-year) and passenger load factor: Dec-07 to Nov-08

In RPK terms, AAPA international passenger traffic declined by 8.5% and the average international passenger load factor for the month deteriorated by 4.6 percentage points, to 72.0%, as a 2.7% reduction in seat capacity failed to match the reduction in demand.

AAPA international passenger traffic growth (% year-on-year) and passenger capacity growth (% year-on-year): Dec-07 to Nov-08

International freight demand (FTKs) posted a steep 15.5% decline year-on-year. Even with an 8.9% reduction in cargo capacity, the average international cargo load factor for the month fell by almost five percentage points to 64.3%.

AAPA international freight traffic growth (% year-on-year) and freight capacity growth (% year-on-year): Dec-07 to Nov-08

Mr Herdman added, "the dramatic slowdown in global economic activity in the second half of the year is now reflected in sharply weaker demand for air travel and cargo shipments".

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