The news from Asian markets shows once again that the industry – in that region at least – has got off to a very positive start to the year. New figures were recently released by the Association of Asia Pacific Airlines (AAPA) and reveal that the region’s airlines are still enjoying the robust growth in international air cargo demand that has been sustained over the first five months of 2017.
Capacity is up
Measured in freight tonne kilometres (FTK), growth was up 12.2% compared to May last year. And with freight capacity across the region going up by 4.3%, the average international freight load factor also rose quite considerably – up 4.7% to 65.6%.
These figures come on the back of a strong start to the year for the air cargo industry in Asia, which has already seen an impressive 10.5% surge in international air cargo demand through to May.
A better outlook for the global economy
So what are the reasons behind this encouraging trend? And does the longer term outlook seem as positive as the current figures suggest? Andrew Herdman, AAPA Director General, hints that it does – but is also keen to add a number of caveats.
“The ongoing pick-up in the global economy, accompanied by increased consumer and investment spending has provided a boost to both international air passenger and air cargo markets. Asian carriers are major players in the global air cargo market, and continue to benefit from the upswing in trade growth.
A challenging environment
“The outlook for both air passenger and air cargo markets remains positive, supported by broad-based expansion across sectors. However, airline profitability remains constrained by competitive yield pressures and higher operating costs. Fuel prices, in particular, have risen by 38% to average US$53 per barrel during the first five months of the year. Given the still challenging operating environment, airlines remain focused on disciplined cost management efforts throughout the business, whilst pursuing further growth opportunities.”
Focus on the basics
Ignazio Coraci comments: “Although the figures out of the Asian markets are encouraging and fit into the wider picture of a more positive global economy, it’s important that as an industry we remain focused on getting the basics right. The growth will only remain sustainable if we put customer needs at the heart of our operations and invest in the technology required to be agile enough to meet their expectations.”