The Association of Asia Pacific Airlines (AAPA) has flagged imminent inflationary pressures – and a “moderation” of business confidence – despite passenger traffic showing continued growth since the start of the year.
AAPA director general Subhas Menon notes that the near-term outlook for Asia-Pacific operators “remains positive” with forward bookings on the rise.
However, he notes that newly introduced tariffs by the Trump administration “signals mounting inflation on the horizon”. Washington in early July imposed sweeping tariffs for most Asia-Pacific nations,
“The moderation in business confidence is also a reflection of the growing concerns over the global economic outlook, with implications for both the air travel and cargo markets further ahead,” says Menon in comments made alongside the release of AAPA traffic data for June.
It is the latest warning from the association about the impact of the US government’s trade posture and economic uncertainty. In recent months, the AAPA had warned of “challenging” times ahead amid issues like the supply chain crunch and rising geopolitical uncertainty.
Says Menon: “Asia Pacific carriers are alert to the cost pressures, while adapting to market conditions and seeking growth opportunities, both regionally and globally.”
The AAPA’s traffic data for June shows a “moderation” in traffic growth rates for the month: international RPKs were up 8%, outpaced by a 8.5% rise in passenger capacity, and leading to a 0.4 percentage point dip in load factor.
During the month, the region’s operators carried 31.2 million passengers, a 7% increase year on year.
Air cargo demand grew 5.6% in June, helped by a rebound in global manufacturing activity. This was, however, offset by a 7.1% increase in freight capacity, leading to a 0.8 percentage point decline in freight load factors.
Menon notes: “The expansion underscores the strength of the region’s economies, which supports the sustained growth in travel demand, even though there is uncertainty in the global trade environment.”
