Preliminary financial performance figures released by the Association of Asia Pacific Airlines (AAPA) showed that Asia Pacific airlines recorded US$3.8 billion in combined net earnings in 2019, a 25 per cent decline compared to the US$5.1 billion reported in 2018. Profitability was impacted by intense competition adding downward pressure on yields, whilst air cargo demand was significantly affected by the escalation of trade disputes, including tit-for-tat trade tariffs between the US and China.
Overall, against the backdrop of a slowing global economy, Asia Pacific airlines saw international passenger traffic as measured in revenue passenger kilometres (RPK) moderate to a 4.2 per cent increase in 2019, following a strong 7.2% growth in 2018. Meanwhile, international air cargo traffic as measured in freight tonne kilometres (FTK) declined by 5 per cent for the year, marking the steepest fall since the global financial crisis.
Collectively, the region’s carriers achieved aggregated operating revenues of US$210.5 billion for the calendar year, almost matching the US$211.2 billion recorded in 2018. Passenger revenue increased by 1.5 per cent to US$167.1 billion, as regional economic expansion supported growth in both leisure and business travel markets, helping to offset the fall in passenger yields caused by persistently stiff market competition.
Air cargo markets were adversely affected by a combination of lower demand and corresponding downward pressure on freight rates. As a result, cargo revenue fell significantly, by 14.5 per cent to a combined total of US$18.4 billion in 2019, reversing the double-digit gains achieved in the preceding year. Asian airlines bore the brunt of the escalation in trade tensions, as they collectively account for over one-third of global air cargo traffic.
Combined operating expenses totaled US$200.4 billion, unchanged from 2018. With global jet fuel prices down by 7.2 per cent to an average of US$78.9 per barrel, fuel expenditure fell by 4.5 per cent to US$52.8 billion. The share of fuel expenditure as a percentage of total operating costs declined by 1.3 percentage points to 26.4 per cent. In contrast, non-fuel expenditure rose by 1.8 per cent to US$147.6 billion, on the back of higher depreciation costs as well as landing fees and en-route charges.
The decline in average fuel prices provided some relief to operating expenditure, but this was offset by higher non-fuel expenses. Consequently, overall operating profit declined by 7.4 per cent to US$10.1 billion, whilst operating margin edged 0.4 percentage points lower to 4.8 per cent for the year.
Commenting on the 2019 financial results, Subhas Menon, AAPA Director General said, “International passenger traffic on Asia Pacific airlines set new records in 2019, but the operating environment became increasingly challenging. The average profit was just US$4 per passenger flown, slimming net margin to a meagre 2 per cent.”
Menon reflected, “Given the current crisis, it is sobering to look back on a time when we all took safe and affordable air travel for granted, and Asian airlines were carrying over four million passengers a day. Since the end of January 2020, that number has plunged dramatically as almost all countries introduced lockdowns and severe restrictions on international travel. Airlines have been forced to ground thousands of aircraft and are currently operating only skeletal networks to meet demand for repatriation flights as well as for shipments of medical supplies and essential goods.”
Menon concluded, “Airlines worldwide are fighting for their very survival, given the collapse of demand. Hopes of a V-shaped recovery have waned. It may take years for the industry to recover to pre-COVID levels. Nevertheless, the early restart of aviation will spur global recovery from the current crisis. To this end, the Asia Pacific aviation community is committed to working closely with governments, public health authorities, and other international bodies in charting a course for a timely and measured restoration of air services.”
Malaysian defense company, Deftech, displayed a range of unmanned aerial vehicles (UAVs) intheir booth during the DSA 2022 expo. The…
Airbus has performed a first A380 flight powered by 100% Sustainable Aviation Fuel (SAF). Airbus’ A380 test aircraft MSN 1…
Cargojet has entered into a five-year strategic agreement with DHL, with a renewal option for an additional two years, to…
The Icelandic airline Eagle Air and the German aircraft manufacturer Deutsche Aircraft have announced a renewal of their support contract…
Hindustan Aeronautics Limited (HAL) has signed an Memorandum of Understanding (MoU) with UPNM Malaysia for collaboration and training of faculty…
Meopta is displaying a wide range of military-grade optical gun sights, scopes, and night vision equipment at the Defense Services…
After signing a Memorandum of Understanding (MoU) with Malaysia’s G7 Aerospace at DSA 2022 event on Monday (Mar. 28), Infoglobal…
Insight Atlantic, a Malaysian defense equipment supplier, is displaying a range of made-in Germany, Lowa tactical footwear in its booth…
PAL Aerospace and Thales have signed an agreement to jointly develop the next generation of mission system during the DSA…
Airod Techno Power (ATP) signed a Memorandum of Understanding (MoU) with Honeywell International to provide Maintenance, Repair, and Overhaul (MRO)…
Advanced Defence Systems (ADS) has signed an MoU with Nexter on the third day of the DSA 2022 event, Wednesday…
In a public announcement released by the Malaysian Ministry of Defence (MINDEF) on Wednesday (Mar. 30), there have been 54…
Sikorsky and Boeing on Thursday announced six new members, including Magnaghi Aeronautica and Collins Aerospace, of Team DEFIANT. The suppliers…
MA Group will provide the fully integrated landing gear system for the DEFIANT X helicopter, consisting of the nose and…
After spending about US$7.4 million on the project, the Australian government has cancelled its Project Air 7003, a program that…
AerCap has signed lease agreements for ten new Airbus A320neo aircraft and two new Airbus A330neo aircraft with ITA Airways.…
A routine service test for an Emirates Airbus A380 aircraft on April 1 has ended with a surprising result. …
Malaysia-based DefTech and Iveco Defence Vehicles are joining hands to establish an authorised MRO centre for Iveco Defence Vehicles trucks…
General Atomics-Aeronautical Systems, Inc. (GA-ASI) has begun the first installation of factory upgrades to a Gray Eagle-Extended Range (GE-ER) Unmanned…
FL Technics has launched a dedicated business line for wheels and brakes maintenance and opened a specialized shop at the…
ScioTeq has launched RDU-4208 LAD, its new full redundant Large Area Display (LAD) that can be deployed in new cockpits…
Etihad Airways, on March 31st., 2022, unveiled its new Airbus A350-1000, registration A6-XWB, on a special inaugural commercial flight from…
RGA-Black Stone Airlines, a newcomer in the Indonesian aviation business, officially started its business in the country after having its…
SIA Engineering Company Limited (SIAEC) announced that it has signed a non-binding Memorandum of Understanding (MoU) with Impeccable Vintage Properties…
Honeywell has signed separate MOUs with Malaysian firms Airod Techno Power (ATP) and Galaxy Aerospace that will further strengthen the…
AirAsia has announced that it will resume international flights from India to Malaysia and Thailand. Flights are now available from…
Embraer and the Brazilian Army have inked a contract to develop and implement Phase Two of the Army's Strategic Program…
The Philippine Air Force (PAF) officially inducted two Turkish-made T129B ATAK attack helicopters and an Airbus Defense and Space C-295…
General Atomics Aeronautical Systems, Inc. (GA-ASI) has been selected to support the Japan Coast Guard's (JCG) RPAS Project. Operations will…
The Royal Thai Navy (RTN) S26T submarine acquisition project from China is at risk of cancellation due to Germany’s refusal…
Headquartered in Singapore with reporters spread across all major regions, GBP Aerospace & Defence is a leading media house that publishes three publications that serve the aerospace and defence sector - Asian Defence Technology, Asian Airlines & Aerospace and Daily News. Known industry-wide for quality journalism, GBP Aerospace & Defence is present at more international tradeshows and exhibitions than any other competing publication in the region.
For over three decades, our award-winning team of reporters has been producing top-notch content to help readers stay abreast of the latest developements in the field of commercial aviation, MRO, defence, and Space.
Copyright 2023. GBP. All Rights Reserved.
Home Defence & Security Space Commercial Aviation Maintence Repair & Overhaul Daily News Events About Us
2025 GBP all rights reserved.