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Asia Pacific Airlines maintained its upward climb in May, but growth shows signs of easing. While the May 2024 traffic results paint a picture of continued progress compared to April, recent data from the Association of Asia Pacific Airlines (AAPA) suggests a slight moderation in momentum for the region’s carriers.
May saw a 23.9% year-on-year increase in international passengers carried by Asia Pacific Airlines, reaching 27.9 million. Even though this growth rate is lower than that of April, which was 32.0%, the passenger traffic recovered to nearly 89.4% of pre-pandemic levels, indicating a sustained recovery.
Similar to the previous month, the demand for long-haul travel remained robust in May. Revenue Passenger Kilometers (RPK) grew by 27.4%, highlighting a continued shift in travel patterns. Notably, airlines managed to maintain a healthy average passenger load factor (79.0%) despite a 26.4% increase in available seats, demonstrating effective capacity management.
Cargo Market Maintains Growth
The air cargo market continued its positive trajectory in May, driven by buoyant regional and global trade activity. While the growth rate moderated slightly compared to April (17.9% vs. 13.7%), the demand for air cargo, measured in Freight Tonne Kilometers (FTK), remained healthy.
However, the average freight load factor climbed to 61.4%, indicating an improvement in capacity utilization compared to April.
Looking Ahead: Balancing Growth and Efficiency
While the overall outlook remains positive, Asia Pacific Airlines faces headwinds. As Mr. Subhas Menon, AAPA Director General, highlighted, high operating costs due to a strong US dollar and expensive jet fuel remain a significant concern. Airlines will likely focus on stringent cost controls while pursuing growth opportunities.
The Asia Pacific Airline industry is experiencing a robust recovery, driven by both passenger and cargo demand. However, airlines need to navigate challenges like rising costs and geopolitical tensions. Maintaining operational efficiency and achieving sustainable growth will be crucial for long-term success.
Key Takeaways
- Passenger and cargo traffic for Asia Pacific Airlines continued to grow in May 2024, albeit at a slightly slower pace compared to April.
- Long-haul travel remains a key driver of passenger demand.
- Airlines are effectively managing capacity while maintaining healthy load factors.
- High operating costs remain a concern for airlines.
In conclusion, the May 2024 traffic results highlight the continuing recovery trends, shifting travel patterns, and challenges that need to be addressed for sustainable growth.
AAPA Director General’s Response
Commenting on the results, Mr. Subhas Menon, AAPA Director General, said, “In the first five months of the year, Asia Pacific Airlines carried a total of 144 million international passengers, reflecting a 44.8% increase compared to the previous corresponding period. During the same period, international air cargo demand grew by 16.0%.”
Mr. Menon added, “The current pick-up in global economic activity, supported by improvements to business confidence levels and increased consumer spending has boosted demand for both international travel and air cargo. Asia Pacific Airlines, being Major players in the air cargo markets have also benefitted from disruptions to ocean freight services.”
Mr. Menon said, “Encouraging trends in passenger and cargo traffic bode well for Asian airlines this year, following strong traffic performance for the year 2023. However, profit margins remain under pressure, with operating costs impacted by the strong US Dollar and jet fuel prices averaging above the US$100 per barrel mark during the first five months of the year. Overall, Asian airlines remain committed to maintaining stringent cost controls across their operations, alongside a proactive pursuit of growth opportunities.”
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