A decline in jet fuel costs, coupled with a weaker US dollar, have provided some cost relief for Asia-Pacific operators, amid a “broadly positive” near-term outlook.
The Association of Asia Pacific Airlines (AAPA), in its traffic data for July, notes that forward booking trends remain “healthy” despite concerns of a sluggish economy.
The region’s operators in July carried 7.7% more international passengers, at about 33.4 million. Traffic rose 8%, outpaced by a 8.6% rise in capacity, and leading to a 0.4 percentage point decline in passenger load factor.
AAPA director general Subhas Menon notes that demand was strongest on routes connecting North-east Asia and South Asia. Asia-Pacific carriers also expanded their networks during the month, which “continued to stimulate traffic”.
International air cargo demand rose 8.6% year on year, despite “prevailing weakness” in global trade flows, and outpacing a 6.4% increase in freight capacity.
Menon notes: “Inventory build-ups ahead of the introduction of tariffs by the US, along with the rerouting of shipments and diversification of sourcing, contributed to the growth in volumes, as businesses prioritised the speed and reliability afforded by air shipments.”
Still, he warns that the air cargo market still faces near-term uncertainty, and this “could weigh on future demand”.
Menon adds: “The global economic outlook remains broadly positive, with healthy forward booking volumes supporting growth in travel markets. However, the implementation of tariffs is expected to add some uncertainty in air cargo markets, and could weigh on future demand.”
