Preliminary traffic figures for the full year 2017 released by the Association of Asia Pacific Airlines (AAPA) showed that both international air cargo and air passenger markets enjoyed robust growth, underpinned by an acceleration in economic activity across most regions.
Broad based expansions in new orders precipitated by greater client demand helped boost trade activity significantly, following years of tepid performance, AAPA said. International air cargo demand for the region’s airlines registered its fastest full year growth since the post-crisis rebound in 2010. In freight tonne kilometres (FTK) terms, demand rebounded with a strong 9.8 per cent growth for the year, following a modest increase in 2016.
Growth in demand outpaced the 4.4 per cent expansion in offered freight capacity by a considerable margin, lifting the average international freight load factor by 3.2 percentage points to 65.2 per cent for the year.
Supported by elevated business and consumer confidence levels, the region’s airlines carried a combined total of 316.8 million international passengers for the year, a solid 6.2 per cent increase compared to 2016. The average international passenger load factor rose by 1.2 percentage points to reach 79.9 per cent for the year, after accounting for a 6.6 per cent expansion in available seat capacity.
Commenting on the results, Andrew Herdman, AAPA director general said: “Whilst competition remained intense, continued availability of affordable air fares and further expansion of routes, amid a positive global economic environment, culminated in a year of firm traffic growth for air passenger markets.”
“In addition, Asian airlines enjoyed solid increases in air cargo volumes through the year, with continued improvements in business conditions boosting trade activity as demand was transmitted through regional supply chains.”
“Overall, the region’s carriers in 2017 benefitted from the robust growth in demand, at the same time, notably higher load factors provided some relief to airline yields. However, increased cost pressures, particularly significantly higher jet fuel prices, in addition to continued market competition, constrained margins.”
Looking ahead, Herdman concluded: “The outlook for the year ahead is broadly positive, as the increase in new orders and recent pick-up in business investments are expected to enhance the sustainability of the global economic upswing. This will in turn lend support to air travel demand in the coming months. Nevertheless, market conditions remain highly competitive. As such, airlines are consistently pursuing new sources of additional revenue whilst keeping a tight rein on costs, to support ongoing investments in future growth opportunities.”