The Association of Asia Pacific Airlines (AAPA) has warned of an “increasingly challenging operating environment” in the near term, even as passenger travel continues to see “sustained” demand.
Preliminary traffic results for May shows a 10.4% increase in international passenger volumes among Asia-Pacific carriers, to 31.2 million.
RPKs grew 11.3%, outpacing a 9.5% increase in capacity, the AAPA data shows.
The association’s director general Subhas Menon notes that strong leisure and business demand is driving the increase in passenger traffic, despite geopolitical volatility.
Menon adds: “Continued improvements in air connectivity are expected to support growth in travel demand.”
He flags a series of challenges confronting the sector: “Nevertheless, Asia Pacific carriers face an increasingly challenging operating environment, shaped by rising trade and geopolitical tensions, persistent supply chain constraints, and more frequent overflight diversions due to airspace closures in conflict zones.”
He warns that should the Middle East conflict prolong, it could lead to volatility on fuel prices, adding to the uncertainty facing the airline sector.
On the cargo front, AAPA data shows demand to have grown 3% year on year in May, while freight capacity inched up 1.3%. It notes that export volumes between the USA and China weakened during the month, but was offset by a rise in shipments to other markets.
Menon adds: “[Air] cargo markets are expected to come under pressure from weakening export orders, although shifts in trade routes could help mitigate some of the impact.”
