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AAPA: Airlines under pressure but profitable
October 27th 2017
At this week’s Association of Asia Pacific Airlines (AAPA) Assembly of Presidents in Taipei, hosted by China Airlines, AAPA director general, Andrew Herdman, cautioned the region’s airlines will remain under pressure over the next twelve months, despite strong passenger and cargo growth. Read More »
As a result of competitive pricing and service innovations across a wide range of business models, international passenger traffic at Asia-Pacific airlines has grown by 7.9% in revenue passenger kilometre (RPK) terms this year to date.
Improvements in the global economy have delivered robust 10% growth in air cargo volumes, particularly due to a surge in demand for semiconductors. Asian carriers account for almost 40% of global air cargo traffic.
“Although there has been considerable pressure on yields in a fiercely competitive environment, Asia Pacific carriers in aggregate are expected to deliver profitability levels similar to last year,” the AAPA director general said.
On a more sober note, the International Air Transport Association (IATA) called for urgent action to address the challenges of infrastructure, regulatory harmonization and sustainability.
“The 34 million jobs and $700 billion of economic activity supported by aviation across the Asia-Pacific region are expected to more than double in the next 20 years. But the realization of these economic benefits is at risk if the region does not address the big long-term challenges of sustainability, infrastructure and regulatory harmonization,” said Alexandre de Juniac, IATA’s director general and CEO in an address at the AAPA gathering.
De Juniac identified infrastructure and regulatory deficiencies in Thailand, Indonesia, the Philippines, India and China.
“We are headed for a major infrastructure crisis. In many ways, the Asia-Pacific region is ahead of the game with major hubs having robust expansion plans. But there are challenges. Bangkok, Manila and Jakarta are among airports that need major upgrades,” he said.
“Chinese air traffic management struggles to cope with growth. And high costs at India’s privatized airports are burdening the industry. The challenge for governments is to ensure sufficient capacity that is affordable and in line with airlines’ operational requirements,” he said.
Separately, in its revised 20-year air passenger forecast, IATA said China would overtake the U.S. as the world’s largest aviation market “around 2022”, several years earlier than previously forecast.
