Passenger markets register growth, cargo demand further declines

Preliminary traffic figures for the month of November released today by the Association of Asia Pacific Airlines (AAPA) showed international air passenger markets recorded a further increase in demand, stimulated by the availability of affordable airfares and improvements to connectivity. On the other hand, demand for air cargo remained subdued in line with weak international trade flows.

In aggregate, the region’s airlines flew 30.3 million international passengers in November, a 3.4% increase compared to the same month last year. The moderate growth reflects the general slowdown in global economic activity. The international passenger load factor averaged 80.1% for the month, after accounting for a 3.6% increase in demand as measured in revenue passenger kilometres (RPK) and a 2.6% growth in available seat capacity.

1.9% cargo drop, despite 4.2% passenger growth despite

During the same month, international air cargo demand in freight tonne kilometre terms (FTK) fell by 1.9% year-on-year, as declines in new export orders affected international trade activity. Offered freight capacity increased by 1.2% year-on-year, resulting in a 2.0 percentage point decline in the average international freight load factor to 62.9% for the month.

Commenting on the results, Mr. Andrew Herdman, AAPA Director General said, “Asian airlines carried a combined 342 million international passengers during the first eleven months of the year, achieving 4.2% growth despite falling business confidence levels and corresponding moderation in economic activity across regions. Tourism activity continued to lend support to leisure travel, with growth within the region boosted by the availability of affordable air fares.”

Asian airlines remain vulnerable, but outlook is positive

“However, air cargo volumes for the first eleven months of 2019 registered a 5.3% decline compared to the same period in the previous year, as challenging business conditions resulting from protracted trade disputes dampened demand. Asian airlines were particularly vulnerable, given the region’s importance in the global manufacturing supply chain. The outlook for air cargo demand remains overshadowed by uncertainty over the resolution of ongoing global trade disputes.”

Looking ahead, Mr. Herdman said, “The outlook for air passenger markets is still reasonably positive, with expectations of continued moderate expansion in the global economy. Meanwhile, the region’s carriers remain vigilant in monitoring and responding to changes in market conditions, whilst seeking new growth opportunities.”