Air passenger demand grows but air cargo volumes continue to decline

Preliminary traffic figures for the month of June released on Monday by the Association of Asia Pacific Airlines (AAPA) show that international air passenger demand continued to grow at a moderate pace, driven by widespread availability of affordable air fares and resilient growth in regional economies.

On the other hand, air cargo markets weakened further with the fall in global new export orders.

The region's airlines registered a 4 per cent year-on-year increase in the number of international passengers carried to an aggregate total of 31 million for the month, exhibiting resilience in growth despite the global decline in business and consumer confidence levels.

As measured in revenue passenger kilometres (RPK), demand grew by 3.4 per cent year-on-year, reflecting strength in regional travel markets. Combined with the 3.1 per cent expansion in available seat capacity, the average international passenger load factor edged 0.3 percentage points higher to 81.7 per cent for the month.

Air cargo markets continued to deteriorate with lacklustre business sentiment feeding into lower demand for air shipments. As a result, the region's airlines recorded a 7.2 per cent year-on-year fall in air cargo demand as measured in freight tonne kilometres (FTK) in June, marking the eighth consecutive month of declining volumes.

The average international freight load factor fell significantly, by 5.1 percentage points to 58.8 per cent after accounting for a 1 per cent increase in offered freight capacity.

"The first half of the year saw the number of international passengers carried by Asian airlines grow by an encouraging 4.7 per cent to a combined total of 186 million, supported by strong leisure demand, which continued to outpace the global rate of economic expansion," said AAPA Director General Andrew Herdman.

"However, during the same period, Asian airlines recorded a 6.2 per cent decline in air cargo demand, reflecting prevailing weakness in international trade flows across regions as widening trade disputes and higher tariffs continued to disrupt global supply chains."

Looking ahead, Herdman said the outlook for the region's travel markets is broadly positive with continued expansion in air passenger demand. On the other hand, with moderating global business optimism levels and the absence of significant progress in trade negotiations, air cargo demand is expected to remain weak.

"Overall, the region's airlines will closely monitor changes to operating conditions while managing business operations with the aim of sustaining profitability," he said.

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