Asia Pacific Airlines Report Strong February Traffic

Building on a positive January, Asia Pacific (APAC) airlines continued to experience significant growth in international passenger and cargo traffic in February 2024, according to the Association of Asia Pacific Airlines (AAPA). Fueled by the Lunar New Year festivities, February saw a significant increase in leisure travel. APAC carriers carried 27 million international passengers in February 2024, a substantial 56.7% rise compared to February 2023. This translates to passenger traffic reaching 89.2% of pre-pandemic levels in 2019. Measured in revenue passenger kilometers (RPK), demand also rose by a commendable 54.4% year-on-year. This growth reflects a particular strength in regional routes. [caption id="attachment_64397" align="aligncenter" width="816"] China Southern Boeing 787-9[/caption] The Cargo Market Maintains an Upward Trajectory Similar to the passenger segment, the air cargo market sustained its growth trajectory in February. This growth was driven by a combination of factors, including business activity and e-commerce. International air cargo demand, measured in freight tonne kilometers (FTK), increased healthy year-on-year by 10.2%. However, the cargo load factor dipped slightly to 57.3% due to a faster expansion of offered freight capacity (20.8%) than demand growth. [caption id="attachment_61285" align="aligncenter" width="767"] Cathay Pacific Cargo Boeing 747[/caption] Future Outlook: Optimism with Challenges Remain AAPA Director General, Mr. Subhas Menon, expressed optimism for the year ahead, citing improving global economic forecasts. However, he acknowledged challenges such as intensifying competition due to ongoing capacity restoration and a cost environment impacted by inflation and supply chain issues. "Despite these headwinds, airlines remain focused on exploring new growth opportunities while maintaining their commitment to safety and customer service," concluded Mr. Menon. [caption id="attachment_80201" align="aligncenter" width="809"] Air India's First Airbus A350-900[/caption] Preliminary International Scheduled Services of Asia Pacific Airlines International Feb-24 Feb-23 % Change Jan-Feb 2024 Jan-Feb 2023 % Change Passengers (Thousand) 27,039 17,259 + 56.7% 54,150 35,405 + 52.9% RPK (Million) 96,595 62,546 + 54.4% 196,440 129,879 + 51.2% ASK (Million) 118,347 77,278 + 53.1% 243,415 159,928 + 52.2% Passenger Load Factor 81.6% 80.9% + 0.7 pp 80.7% 81.2% - 0.5 pp FTK (Million) 5,123 4,648 + 10.2% 10,718 9,212 + 16.3% FATK (Million) 8,947 7,404 + 20.8% 18,661 15,127 + 23.4% Freight Load Factor 57.3% 62.8% 5.5 pp 57.4% 60.9% - 3.5 pp RPK = revenue passenger kilometers ASK = available seat kilometers FTK = freight tonne kilometers FATK = available freight tonne kilometers [caption id="attachment_73375" align="aligncenter" width="861"] Thai Airways Airbus A350-900[/caption] Key Takeaways February saw a 56.7% year-on-year increase in international passenger traffic for Asia Pacific airlines. The passenger load factor reached 81.6%, which is nearing pre-pandemic levels. Air cargo demand grew by 10.2% year-on-year. Airlines face challenges like competition and rising operational costs. Commenting on the results, Mr. Subhas Menon said, “During the first two months of the year, Asian carriers saw continued robust growth in international passenger markets, with 54 million passengers carried, an increase of 53% compared with the corresponding period in the previous year. The strong demand came on the back of ongoing network expansion by carriers, with load factors at levels seen before the pandemic.” “The same period saw a 16% increase in international air cargo demand, progressing the recovery recorded since the last quarter of 2023. Healthy growth in e-commerce transactions fuelled a rise in demand for speedier air transport. Additionally, there were also indications of a modal shift from sea to air due to the Red Sea crisis.” [caption id="attachment_66838" align="aligncenter" width="889"] Japan Airlines Airbus A350-900. Image: Airbus[/caption] Looking ahead, Mr. Menon said, “The upturn in global economic activity and rise in business confidence levels augurs well for air cargo markets in the coming months. Correspondingly, the demand outlook for international travel is positive based on forward booking trends. The region’s carriers remain nimble and proactive in exploring new avenues of growth, whilst at the same time tackling numerous challenges including rising operational costs and stiff competition."

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