AAPA reports moderate growth in air passenger demand, further weakness in air cargo markets

Preliminary traffic figures for August released on Wednesday by the Association of Asia Pacific Airlines (AAPA) showed moderate growth in international air passenger markets.

But this was in contrast with further reductions in air cargo demand against a backdrop of diminishing business confidence levels and significant declines in international trade volumes.

Overall, Asia Pacific airlines carried a combined 32.6 million international passengers in August, 2.3 per cent more than the same month last year. In revenue passenger kilometres (RPK) terms, demand grew by 3.1 per cent year-on-year.

The average international passenger load factor eased 0.2 percentage points lower to 82.8 per cent for the month after accounting for 3.4 per cent expansion in available seat capacity.

In contrast to air passenger markets, air cargo demand in freight tonne kilometres (FTK) fell by 6.4 per cent year-on-year in August. Subdued demand conditions, with businesses remaining cautious on their inventories, contributed to the persistent weakness.

Combined with a 1.1 per cent increase in offered freight capacity, the average international freight load factor fell by 4.7 percentage points to 58.3 per cent for the month.

"The first eight months of the year saw Asian airlines carry a combined 251 million international passengers, representing a sustained 4.3% increase in demand for international air travel, but growth rates are moderating as consumers become more cautious about the economic outlook," said AAPA Director General Andrew Herdman.

"Meanwhile, air cargo demand declined by 5.9 per cent during the first eight months of the year with business confidence deteriorating further in August against a backdrop of heightened global trade tensions. Consumer goods markets continued to expand but demand for intermediate goods fell further, contributing to the decline in air shipments."

Looking ahead, said Herdman, Asian airlines continue to face a challenging business environment while the long-term outlook for air travel remains broadly positive.