Business Digest
Cheaper fares push demand to new highs
November 1st 2015
Bolstered by an increase in travel demand going into the holiday season, Asia Pacific airlines recorded a 6.5% growth in the number of international air passengers carried to an aggregate total of 23.6 million. Read More » In revenue passenger kilometre (RPK) terms, international passenger demand grew by 8.6%, underscoring relative strength on long haul markets. The average international passenger load factor climbed 1.8 percentage points higher to 80.9%, exceeding the 80% mark for the first time in the year, after accounting for a 6.1% rise in available seat capacity.
During the first seven months of the year, the region’s airlines carried a combined total of 159.3 million international passengers, robust 9.0% growth compared with the same period last year. Competitive airline fares helped boost demand, with growth above the 4.9% increase achieved in 2014. Load factors continued upwards, but the year-to-August average of 78.3% remained below the global average of 79.4%.
In recent years, the region’s passenger markets have been relatively resilient to shocks, recording encouraging growth in passenger volumes. Looking ahead, the positive momentum is expected to continue to year end, with lower fuel costs, intense market competition and consequently more affordable fares lending support to demand.
Mid-year fall off in freight traffic
In contrast to the continued uptrend in air passenger demand, Asia Pacific carriers experienced another slowdown in air freight markets in July. Demand in freight tonne kilometre (FTK) terms declined 2.4% compared with the same month last year, following a 2.2% year-on-year drop in June. Subdued global trade conditions and faltering export demand contributed to the negative result. Offered freight capacity expanded by 2.8%, which resulted in a 3.3 percentage point fall in the average international freight load factor, to 62.0%, for the month.
Growth in international air freight demand narrowed to 3.5% during the first seven months of the year, after accounting for the declines in June and July. At 63.9%, the average international air freight load factor was 0.6 percentage points lower than in the same period last year, helped by stronger demand growth vis-à-vis capacity expansion during the first quarter of the 2015.
The outlook for air cargo markets has become increasingly uncertain, on the back of volatile stock markets, adverse currency fluctuations and concerns about the slowdown in China’s economy.
Asia-Pacific passenger demand to outpace capacity as freight decline continues
Underpinned by a boost in leisure travel demand during the holiday season, the region’s operators carried a combined total of 24.9 million international passengers in August, 7.2% more than the same month last year. Demand in revenue passenger kilometre terms (RPK) grew by 8.2%, outpacing the 5.7% expansion in available seat capacity to result in a 1.8 percentage point increase in the average international passenger load factor to a year-to-date monthly high of 83.0%.
The weakness in air cargo markets extended to the month of August, with demand in freight tonne kilometre (FTK) terms recording a slight 0.3% decline compared to the same month last year. Offered freight capacity grew by 3.3%, and consequently the average international freight load factor fell by 2.2 percentage points to 61.0% for the month.
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This report was compiled by the Research and Statistics Department of the AAPA Secretariat.
