Preliminary financial performance figures
compiled by the Association of Asia Pacific Airlines (AAPA) showed
that Asia Pacific-based carriers in aggregate recorded US$4.8
billion in net profits in 2011, 47% lower than the record US$9.0
billion achieved in the previous year.
The surge in oil prices, and a weak cargo
market, contributed to the fall in earnings.
Total revenues for the region’s carriers reached
US$162 billion, 10% higher compared to the US$147 billion reported
in 2010. Passenger revenues grew by 15% to US$121 billion, but
cargo revenues fell by 1.4%, to US$22 billion in 2011.
Operating expenses increased by 15% to US$155
billion. The main cause of the increase was a 28% surge in fuel
costs, to US$52 billion. The share of fuel costs as a percentage
of total expenses rose by 4 percentage points to 34%, from 30% in
the previous year. Non-fuel expenditures grew by 9.6% to US$103
For the year 2011, Asian airlines’ international
passenger traffic, measured in revenue passenger kilometre terms,
grew by 3.7%, whereas international cargo traffic, expressed in
freight tonne kilometres, fell by 4.8%.
Commenting on the 2011 financial results, Mr.
Andrew Herdman, AAPA Director General said, “Asia Pacific carriers
continued to outperform the overall industry in 2011, with
continued growth in passenger numbers, but profit margins were
squeezed by high oil prices, as well as the impact of a weak air
cargo market. Overall, Asian airlines in aggregate made combined
profits of US$4.8 billion, but on revenues of US$162 billion, that
represents only a 3% profit margin and a poor return on invested
Looking ahead, Mr. Herdman said, “Airlines
around the world are still facing a number of significant
challenges in 2012, including the effects of persistently high oil
prices, and slower economic growth in the major developed markets.
So far this year, Asian airlines have continued to benefit from
stronger economic growth within the region, seeing further growth
in international passenger numbers, but air cargo markets remain
weak, with the result that operating margins remain under
pressure. Airlines are responding by carefully matching capacity
to changes in demand, and maintaining strict cost controls
throughout the business.”
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