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Asia Pacific airlines experienced a strong rebound in 2023 following three consecutive years of losses, according to the Association of Asia Pacific Airlines
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Healthy travel demand in the leisure and travel sectors resulted in combined net earnings of $8.8 billion
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Global air cargo demand, however, saw a 2.8% decline in freight ton kilometers, driven by inflationary pressures, a robust US dollar, and a downturn in demand for goods
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Aggregated cargo revenue plummeted 43.3% to $21 billion, driven by weakness in trade activity and easing freight rates
Asia Pacific airlines experienced a strong rebound last year following three consecutive years of losses, based on latest figures from the Association of Asia Pacific Airlines (AAPA).
Healthy travel demand in the leisure and travel sectors regionally and worldwide resulted in combined net earnings of $8.8 billion.
With the last remaining pandemic-induced travel restrictions lifted, travel demand in 2023 experienced a resurgence in travel demand to the tune of a 130.7% hike in passenger traffic measured in revenue passenger kilometers (RPK).
But the same could not be said of global air cargo demand which saw a 2.8% decline in freight ton kilometers (FTK). This was driven by inflationary pressures, a robust US dollar, and a downturn in demand for goods.
Subhas Menon, AAPA director general, said: “In 2023, Asia Pacific airlines made a welcome turnaround following three consecutive years of steep losses during the COVID-19 pandemic years.”
He said the region’s carriers saw a significant operating profit margin of 7.8%, compared to minus 9.3% in 2022.
Menon added that Asian airlines benefitted from a “vigorous recovery” in passenger demand.
For 2023, Asia Pacific airlines had operating revenues of $198.1 billion, compared to 2022’s $128 billion, or a 54.8% jump. Combined passenger revenue more than doubled, by 105.4% to $151.5 billion. However, passenger yields dropped by 6.7% to $0.86 per RPK.
Aggregated cargo revenue sank considerably, by 43.3% to $21 billion, driven by weakness in trade activity and easing freight rates. Despite the decline, however, average cargo yields stayed above pre-pandemic levels.
Operating expenses rose 30.9% to $182.6 billion, in tandem with ramp-up flight frequencies and restoration of networks.
Fuel expenditure rose 41.5% to $57.7 billion, partially mitigated by a 20% fall in global jet fuel prices to an average of $113.4/barrel.
Meanwhile, non-fuel costs rose 26.5% to $124.9 billion due to higher spending on staff along with landing fees and enroute charges.
Menon said the outlook for the near term “is generally positive.”
Demand for air travel globally remains strong, complemented by resurgent growth in international air cargo markets. Challenges, however, remain ever present “including delayed deployment of additional capacity due to supply chain constraints and persistent cost pressures.”
