Summary
- Asia-Pacific airlines are steadily recovering from the pandemic, with international passenger numbers greater than doubling in October in comparison with last 12 months.
- Airlines are effectively matching capability to demand, leading to a passenger load factor of 80.4% in October, surpassing pre-pandemic levels.
- While air cargo markets are struggling to search out stability, there was growth in demand leading as much as major retail events, providing some optimism for the longer term.
Last month, the CEOs of a few of Asia’s largest airlines got here together in Singapore for the 2023 Association of Asia Pacific Airlines (AAPA) 67th ‘Assembly of the Presidents.’ It was a much more buoyant meeting than the one held in Bangkok the 12 months prior, as many of the airlines represented are on strong growth paths and edging ever closer to returning to pre-COVID levels.
Load aspects keep rising
The October 2023 traffic results collated by the Association of Asia Pacific Airlines (AAPA) show that international passengers climbed to 25.3 million, greater than doubling the 12.5 million carried in October last 12 months but well in need of the 30.7 million passengers in October 2019. In September 2023, international traffic reached 81% of 2019 levels, and that edged barely higher to 83% in November. At this rate of growth, there continues to be a while until the region makes a 100% recovery to pre-pandemic levels.
Photo: Air India
What the Asia-Pacific airlines are doing thoroughly is matching capability to demand, and that has again surfaced within the October results. Available seat capability grew by 77.9%, but demand (as measured by revenue passenger kilometers, or RPKs) was up by 85.6%. AAPA attributed this performance to the relative strength of short-haul markets, which pushed the monthly passenger load factor to 80.4% in October, beating the 79.8% recorded in October 2019.
To offer a more comprehensive picture of how international traffic flows throughout Asia-Pacific, AAPA goes beyond its membership to collate monthly traffic data from 40 airlines, including full-service, hybrid and low-cost carriers. Generally, the airlines are household names, including Qantas, Air Recent Zealand, Singapore Airlines, Cathay Pacific, AirAsia, Air India, Garuda Indonesia, Thai Airways, Air China and Air Astana.
Growth is coming from all markets
AAPA Director General Subhas Menon said Asia-Pacific carriers continued to enjoy robust growth in business and leisure travel markets going into the fourth quarter, reflecting healthy travel appetite supported by the resilient growth of the region’s economies.
“Prospects for further growth in air travel demand remain positive in the approaching months. As for air cargo markets, the recent uptick in demand is welcome, although the outlook stays uncertain against a backdrop of continued declines in export markets. Overall, the region’s carriers remain focused on improving financial performance following three years of steep pandemic-led losses whilst delivering the very best level of customer support.”
Photo: Cathay Pacific
Cargo markets are struggling to search out a brand new normal because the sudden and unprecedented surge in the course of the pandemic has thrown traditional patterns and freight volumes out the window. A normal measure used is freight tonne kilometers (FTK). In October 2019, FTK was 6.27 million, in comparison with 5.80 million in the course of the same period in 2023, and 5.63 million in October 2022.
Nonetheless, on a positive note, October marked the second consecutive month of international air cargo demand growth ahead of major retail promotional events, comparable to Singles Day, which pushed e-commerce volumes higher in readiness for the end-of-year festive season.
Perhaps this trend of positivity will permeate passenger markets and move the recovery needle above the 90% mark in the course of the Lunar Recent 12 months period. Nonetheless, based on the slow but regular path of 2023, the total recovery may not appear until the center of 2024.