Moderate growth in air passenger markets, but weak air cargo demand

Preliminary traffic figures for May released on Tuesday by the Association of Asia Pacific Airlines (AAPA) showed moderate growth in international air passenger markets with sustained regional economic expansion supporting business and leisure travel markets.

However, air cargo demand fell further as export activity continued to slow in the face of challenging business conditions.

A combined total of 30.4 million international passengers were carried by Asia Pacific airlines in May, reflecting a 4.4 per cent increase compared to the same month last year.

Demand in revenue passenger kilometres (RPK) grew by 4.5 per cent year-on-year, surpassing the 3.6 per cent increase in available seat capacity, resulting in a 0.7 percentage points increase in the average international passenger load factor to reach 78.5 per cent for the month.

The wider imposition of trade tariffs dampened demand and affected global supply chains, leading to declines in new export orders. Consequently, the region's airlines registered a 6.5 per cent fall in air cargo demand as measured in freight tonne kilometres (FTK) in May.

Combined with a marginal 0.3 per cent increase in offered freight capacity, the average international freight load factor fell by 4.3 percentage points to 59 per cent for the month.

"Sustained expansion in major global and regional economies supported further growth in passenger markets, but air cargo demand is weak as a result of the slowdown in the manufacturing sector and deteriorating business confidence, undermined by the ongoing trade disputes," said AAPA Director General Andrew Herdman.

"Overall, during the first five months of the year, Asian airlines carried an aggregate total of 155 million international passengers, 4.8 per cent more than the same period last year. In marked contrast, in the same period Asian airlines saw a 6.2 per cent contraction in air cargo demand," he said in a statement.

Looking ahead, Herdman said: "While prospects for growth in travel markets remain positive, operating conditions have become increasingly challenging for the region's carriers. Airlines are grappling with the effects of weaker air cargo demand, volatile oil prices and renewed downward pressure on passenger yields. Nevertheless, the region's airlines remain focused on improving operational productivity to deliver value added services to customers."

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