Asia Pacific Airlines Post Higher Earnings

Preliminary financial performance figures from the Association of Asia Pacific Airlines (AAPA) show that Asia Pacific airlines achieved US$5.2 billion in combined net profits in 2012, 6.7% above the US$4.8 billion reported for the year 2011.

Sustained growth in passenger markets helped mitigate a challenging operating environment marked by prolonged weakness in air cargo markets and persistently high jet fuel prices.

Aggregate operating revenue for the region's carriers grew by 7.6% to reach US$175 billion, from US$162.7 billion in 2011. The improvement was underpinned by an 8.5% growth in passenger revenue to US$133.5 billion. In contrast, cargo revenues declined by 3.3% to US$21.1 billion.

For the year 2012, Asian airlines saw a 5.8% increase in international passenger traffic, measured in revenue passenger kilometre terms, and a 3.4% decline in international cargo traffic, expressed in freight tonne kilometres.

Operating expenses totalled US$166.5 billion, 7.0% more than the US$155.7 billion recorded in the previous year. The main cause of the increase was a 12.2% jump in fuel expenditure to US$58.8 billion, with jet fuel prices averaging US$128 per barrel in 2012. The share of fuel expenditure as a percentage of total operating costs rose to 35.3% in 2012, from 33.7% the previous year. Non-fuel expenditures grew by 4.3% to US$107.7 billion.

Commenting on the 2012 financial results, Mr. Andrew Herdman, AAPA Director General said, "Asia Pacific airlines in general recorded a modest improvement in their overall financial performance for 2012, underpinned by sustained economic growth driving further growth in passenger demand in both business and leisure travel markets, particularly in the Asia Pacific region. Prudent capacity management maintained relatively high load factors, helping to offset the impact of persistently high fuel prices and an extended period of weak demand in the global air cargo market."

Looking ahead, Mr. Herdman said, "With consumer and business confidence both holding up relatively well in the Asia Pacific region, we are seeing further growth in passenger numbers this year. Overall, Asian airlines are expected to remain at the forefront in promoting further development of the global airline industry, with continued investments in fleet expansion and customer service innovation."