Moderate growth in air passenger markets, but further decline in cargo demand: AAPA

Kuala Lumpur: Preliminary traffic figures for April released on Monday by the Association of Asia Pacific Airlines (AAPA) showed continued growth in international air passenger markets supported by ongoing expansion in the global services sectors.

On the other hand, air cargo volumes contracted further following disruptions to global supply chains amid heightened trade tensions, particularly between the United States and China.

Asia Pacific airlines collectively recorded 3.7 per cent increase in the number of international passengers carried to a combined total of 31.2 million in April, with promotional airfare campaigns lending support to travel markets.

Measured in revenue passenger kilometres (RPK), demand grew by 3.5 per cent, reflecting relative strength in regional travel markets. After accounting for a 4.1 per cent increase in available seat capacity, the average international passenger load factor edged 0.5 percentage points lower to 80.8 per cent for the month.

Air cargo demand as measured in freight tonne kilometres (FTK) fell by a steep 9.1 per cent year-on-year in April with further declines in new export orders affecting trade activity. In particular, the fall in air shipment volumes coincided with production declines in the region's technology equipment sectors.

While demand fell, offered freight capacity edged 0.4 per cent higher, leading to a 6 percentage point drop in the average international freight load factor to 57.3 per cent for the month.

"These traffic trends paint a mixed picture," said AAPA Director General Andrew Herdman.

"The first four months of the year saw a 4.9 per cent increase in the number of passengers carried by the region's airlines to an aggregate total of 125 million, whereas air cargo markets experienced a 6.3 per cent decline in demand during the same period."

Growth remained relatively encouraging in air passenger markets with sustained demand in regional economies, he said. "Since the last quarter of 2018, however, air cargo volumes have recorded declines as unresolved disputes and the imposition of trade tariffs led to a marked slowdown in international trade flows."

Looking ahead, said Herdman, the current trade tensions and further erosion in business confidence could undermine growth prospects going forward, even though demand for international air travel is expected to remain relatively firm.

"The region's airlines are proactively exploring new opportunities for growth while carefully managing capacity expansion and implementing measures to contain costs in a bid to navigate successfully through the ongoing challenges," he said in a statement.