Preliminary aggregated financial performance
figures from the Association of Asia Pacific Airlines (AAPA) show
that Asia Pacific airlines achieved US$8.8 billion
in combined net earnings for the full year 2017.
economy saw broadly based growth in advanced and emerging markets,
boosting both business and leisure travel demand, whilst air cargo
markets were lifted by an acceleration in global trade activity.
At the same time, moderate capacity expansion lent support to
Asian airlines saw international passenger
traffic, expressed in revenue passenger kilometer terms (RPK),
recording a robust annual growth rate of 8.6%, supported by the
widespread availability of affordable airfares and continued
expansion in network connections. With major manufacturing
economies located in the region benefitting from increased trade
activity, the region's airlines recorded an impressive 9.6% jump
in international air cargo traffic as measured in freight tonne
kilometres (FTK) for the year.
Underpinned by the firm increases in both air
passenger and cargo markets, Asia Pacific airlines achieved a 6.7%
growth in combined operating revenue to US$176.6 billion in 2017.
Passenger revenue increased by 6.0% to US$135.6 billion. Intense
competition led to a marginal 1.0% decline in passenger yields to
7.9 US cents per RPK, although the decline was less severe
compared to previous years. Cargo revenue increased significantly,
by 14.6% to US$18.6 billion. Following several years of
contraction, cargo yields rebounded with a 6.0% growth to 25.0 US
cents per FTK.
Combined operating expenses climbed 8.7% higher
to US$165.0 billion for the year. Fuel costs rose significantly,
by 19.6% to US$40.6 billion, as global jet fuel prices climbed
24.5% to average US$65.4 per barrel. The share of fuel expenditure
as a percentage of total operating expenses rose by 2.2 percentage
points to 24.6%. Non-fuel expenditure increased by 5.6% to
US$124.4 billion, in line with higher traffic volumes.
Commenting on the 2017 financial results, Mr.
Andrew Herdman, AAPA Director General said, "Overall, Asia Pacific
carriers as a group achieved commendable earnings performance in
2017, with the solid 31.6% increase in net earnings to US$8.8
billion underpinned by strong growth in both air passenger and
cargo volumes, and higher average load factors. Nevertheless, the region's
airlines continued to face some significant headwinds in the form
of stiff competition, and increased cost pressures from markedly
higher fuel prices and rising labour costs. Reflecting the highly
competitive business environment, the average operating margin was
6.6% for the year, with net profits of just over US$6 per
Looking ahead, Mr. Herdman said, "The ongoing
expansion in the global economy bodes well for Asian airlines.
Business activity is expected to remain relatively robust whilst
increased consumer spending should underpin further growth in
passenger travel and continue to support air cargo demand in the
coming months. Overall, Asian airlines continue to evolve in the
face of changing market dynamics, implementing measures to
increase efficiency and carefully control operating costs whilst
seeking opportunities to maximise revenue. In addition, the
region's airlines remain focused on enhancing business performance
through increased investments in new technologies and modern fuel