The Association of Asia Pacific Airlines (AAPA) warns that airline profit margins in the region will remain “under pressure” in the near-term, amid a strong US Dollar and higher jet fuel prices.

This is despite “encouraging trends” seen in both passenger and cargo demand, which the association says is a reflection of a pick-up in global economic activity. 


Source: Alfred Chua/FlightGlobal

Batik Air Malaysia and Malaysia Airlines at Kuala Lumpur airport.

In traffic figures released for May, the AAPA notes that the region’s carriers saw a 24% year-on-year jump in international passenger numbers to 27.9 million. The figure is close to 90% that of pre-pandemic 2019, it adds. 

RPKs for May grew 27% year on year, only slightly outpacing capacity growth at 26%. 

On the cargo front, freight-tonne kilometres increased 18% year on year in May, with cargo load factor up 1.4 percentage points to 61.4%. 

AAPA director general Subhas Menon says: “The current pick-up in global economic activity, supported by improvements to business confidence levels and increased consumer spending, has boosted demand for both international travel and air cargo. Asia Pacific airlines, being major players in the air cargo markets, have also benefitted from disruptions to ocean freight services.”

He notes that the region’s operators will have maintain “stringent cost controls across their operations, alongside a proactive pursuit of growth opportunities” in the face of profit margin pressures.