TravelNewsAsia.com
Thu, 7 May 2020

Asia Pacific Airlines Report 25% Decline in Net Earnings for 2019

Preliminary financial performance figures from AAPA show that Asia Pacific airlines recorded US$3.8 billion in combined net earnings in 2019, a 25% decline compared to the US$5.1 billion reported in 2018.

Profitability was impacted by intense competition adding downward pressure on yields, whilst air cargo demand was significantly affected by the escalation of trade disputes, including tit-for-tat trade tariffs between the US and China.

Overall, against the backdrop of a slowing global economy, Asia Pacific airlines saw international passenger traffic as measured in revenue passenger kilometres (RPK) moderate to a 4.2% increase in 2019, following a strong 7.2% growth in 2018.

Meanwhile, international air cargo traffic as measured in freight tonne kilometres (FTK) declined by 5% for the year, marking the steepest fall since the global financial crisis.

Malaysia Airlines Airbus A350 reg: 9M-MAD. Picture by Steven Howard of TravelNewsAsia.com Click to enlarge.

Collectively, the region's carriers achieved aggregated operating revenues of US$210.5 billion for the calendar year, almost matching the US$211.2 billion recorded in 2018. Passenger revenue increased by 1.5% to US$167.1 billion, as regional economic expansion supported growth in both leisure and business travel markets, helping to offset the fall in passenger yields caused by persistently stiff market competition.

Air cargo markets were adversely affected by a combination of lower demand and corresponding downward pressure on freight rates. As a result, cargo revenue fell significantly, by 14.5% to a combined total of US$18.4 billion in 2019, reversing the double-digit gains achieved in the preceding year. Asian airlines bore the brunt of the escalation in trade tensions, as they collectively account for over one-third of global air cargo traffic.

Combined operating expenses totaled US$200.4 billion, unchanged from 2018. With global jet fuel prices down by 7.2% to an average of US$78.9 per barrel, fuel expenditure fell by 4.5% to US$52.8 billion. The share of fuel expenditure as a percentage of total operating costs declined by 1.3 percentage points to 26.4%. In contrast, non-fuel expenditure rose by 1.8% to US$147.6 billion, on the back of higher depreciation costs as well as landing fees and en-route charges.

The decline in average fuel prices provided some relief to operating expenditure, but this was offset by higher non-fuel expenses. Consequently, overall operating profit declined by 7.4% to US$10.1 billion, whilst operating margin edged 0.4 percentage points lower to 4.8% for the year.

Mr. Subhas Menon, Director General of the Association of Asia Pacific Airlines (AAPA), said, "International passenger traffic on Asia Pacific airlines set new records in 2019, but the operating environment became increasingly challenging. The average profit was just US$4 per passenger flown, slimming net margin to a meagre 2%. Given the current crisis, it is sobering to look back on a time when we all took safe and affordable air travel for granted, and Asian airlines were carrying over four million passengers a day. Since the end of January 2020, that number has plunged dramatically as almost all countries introduced lockdowns and severe restrictions on international travel. Airlines have been forced to ground thousands of aircraft and are currently operating only skeletal networks to meet demand for repatriation flights as well as for shipments of medical supplies and essential goods."

Looking ahead, Mr. Menon said, "Airlines worldwide are fighting for their very survival, given the collapse of demand. Hopes of a V-shaped recovery have waned. It may take years for the industry to recover to pre-COVID19 levels. Nevertheless, the early restart of aviation will spur global recovery from the current crisis. To this end, the Asia Pacific aviation community is committed to working closely with governments, public health authorities, and other international bodies in charting a course for a timely and measured restoration of air services."

See latest Travel News, Video Interviews, Podcasts and other news regarding: COVID19, AAPA, Asia Pacific Airlines.

Headlines: Langham Signs Hotel and Residences in Australia  IATA Reports Signs of Recovery as RPKs Plunge 94.3% in April  AirAsia Offers Unlimited Flight Date Changes  Qatar Airways to Resume Flights to Venice, Italy  Hong Kong Airlines Appoints APG as GSA in Canada and USA  Amadeus Integrates Troovo's RPA Engine into its B2B Wallet  Delta to Continue Blocking Middle Seats and Limit Pax Per Cabin  Severe Capacity Crunch in Air Cargo; ACTKs Down 42% in April  Park Hyatt Opens in Suzhou, China  Virgin Atlantic to Increase Cargo-Only Flights by 35% in June  FlyArystan to Launch Flights to Aktau, Atyrau and Aktobe  Dassault Completes Falcon 900B Passenger to Cargo Conversion in 8 Days  IATA Urges Governments to Implement ICAO's Guidelines for Restoring Air Travel  Iain Langridge Joins Belmond as Divisional MD Asia Pacific  A400M Completes Full Paratrooper Simultaneous Dispatch Certification  Mandarin Oriental Hong Kong to Close Pierre and the M Bar  Korean Air Adds Baggage Tracking Service to Skypass App  Fiji Airways Cancels All Int. Flights in July; Warns of August Reductions  Shinta Mani Wild Continues to Support Wildlife Alliance Rangers in Cambodia  Southwest Airlines Expands Partnership with Sabre  Bombardier Concludes Sale of CRJ Series Regional Jet Program to Mitsubishi  airBaltic to Resume Flights Between Riga and Paris, France  British Airways Removes Seats from Two Boeing 777-200s  New COVID19 Preventive Measures as HKIA Resumes Transit Services  Mekong Tourism Forum 2020 Postponed to 15-16 February 2021  Joanna Gunn Joins Rosewood Hotel Group as Chief Brand Officer  Bangkok Airways Waives Fees; Offers 20kg Extra Baggage Allowance  Gulf Air Resumes Pakistan Flights  CWT Partners SAP Concur Solutions  Finnair Asks FFP Members How They Feel About Flying Again  Airbus A400M Receives Automatic Low Level Flight Certification  COVID19 Interview with GM of Courtyard by Marriott Siem Reap, Ms. Ashley Lai  Int. Passenger Numbers of Asia Pacific Airlines Down 98.8% in April  Marriott Warns of More Cutbacks; Extends Furloughs and Reduced Work Weeks  Air Canada Cargo Expands Network with 5 New Destinations  SAS to Operate More Flights in June  Arna Wahl Davies Appointed Chair of CINZ's PCO Group  Boeing Resumes Production of 737 MAX  United Airlines Turns Old Uniforms into Masks for Employees  Aviation: Heavy New Debt Levels Will Weigh Down Airline Recovery  Thai Airways Flies Stranded Italians and Thais Back Home  Congo Airways Converts E175 Deal into Order for Two E190-E2s  Finnair Signs 10-Year Global Maintenance Agreement with ATR  Air Canada Looking to Raise Over $1 Billion with Shares and Notes  Air Astana Establishes Cargo Division  Hotels in Asia Pacific Report April Drop in ADR, OR and RevPAR  Fiji Airways Secures Vital Support from Government  Iain McCormack Joins Vakkaru Maldives as GM  Grand Richmond Hotel in Nonthaburi Launches Quarantine Package  airBaltic Reports 500% Increase in Bookings  Wetherspoon Unveils Social Distancing and Hygiene Plans for 875 Pubs  Air New Zealand Reopens Airport Lounges  Fiji Airways Cuts Workforce by Over 50%; Reduces Salaries and Working Hours  Air Canada to Operate Flights to 97 Destinations This Summer  Hertz Files for Chapter 11 Bankruptcy Protection in USA  Lufthansa Technik to Fit Three A350s with VIP Cabins for German Air Force  Executive Appointments as Norwegian Restructures Management  CAE USA to Develop C-130J Simulators for AFSOC  AirAsia Extends Credits for 2 Years  Rolls-Royce to Layoff at Least 9,000 People  A Song of Support and Thanks to the NHS Staff of Ysbyty Enfys, Llandudno  Aviation: Global Coordination Needed for COVID19 Measures  British & Irish Lions Appoints CFO and Director of Marcom  Hannah Loughlin Joins Six Senses Con Dao as DOSM  Finnair Looking at More Layoffs  SITA Invests in Digital IDs Designed to Replace Traditional Passports  United Airlines Partners Clorox and Cleveland Clinic to Launch CleanPlus  Biosecurity for Air Transport: A Roadmap for Restarting Aviation  airBaltic to Resume Flights from Riga to Berlin, Helsinki and Munich  Etihad Airways Expands Flight Schedule  Eric Hallin Appointed GM of Six Senses Con Dao in Vietnam  Mekong Innovative Startups in Tourism 2020 Calls for Applications  Qatar Airways Starts Codesharing with American Airlines  Airbus Opens First Dedicated A220 Production Facility in USA  Delta Installing Plexiglass Shields at Airports  Finnair to Resume Long Haul Flights in July with Strong Focus on Asia  Hong Kong to Target Domestic Tourism; Reports April Visitor Arrivals  Airbnb Appoints Tara Bunch as Global Head of Operations  Hyatt to Layoff 1,300 People Globally  Thai Airways Extends Suspension of International Flights  Air France to Resume Select Flights  Etihad Holidays Partners dnata Travel Group in UK  IHG Expands Cleaning Protocols at Hotels Worldwide  Finnair Increases Cargo Capacity by Removing Seats from Two A330s  PG to Resume Flights to Chiang Mai, Lampang, Phuket and Sukhothai  Cathay Pacific and Cathay Dragon Carried Just 13,729 Passengers in April  Singapore Airlines Group's RPKs Down 99.6% in April  HKIA Handled 32,000 Pax and 9,445 Flight Movements in April  Smiths Detection Launches UVC Light Kits for Airport Security Checkpoints  Boeing's X-37B Autonomous Spaceplane Sets Off on 6th Mission  History of Conwy, North Wales - Interview with Councillor Bill Chapman  Qatar Airways to Resume Flights to Brisbane, Australia  Delta to Operate Passenger Flights to Frankfurt and London  MICE: New Zealand Limits Events to 100-People  Mike Delaney to Lead Boeing's Confident Travel Initiative  Delta to Retire Boeing 777s by Year-End  Air Astana Celebrates 18th Anniversary with Resumption of Domestic Flights  Emercom of Russia Takes Delivery of First Ansat Helicopter  Emirates Unveils Plan to Resume Flights to Nine Destinations  Hong Kong Int. Airport Makes it Compulsory to Wear a Mask  Korean Air Outlines Plan to Secure KRW 2.2 Trillion to Overcome COVID19  IATA Takes Pessimistic Look at Future of Air Travel  AirAsia Introduces Contactless Technology to Enhance Safety  WHO Launches Two COVID19-Related Mobile Apps  UK's Civil Aviation Authority Signs MOU with BoeingKevin Schmidt Re-Elected as Chairman of Security Manufacturers Coalition  Cebu Pacific's COVID19 Safety Measures  AirAsia Philippines Cancels All Domestic and Int. Flights Until 31 May  Changi Airport in Singapore to Close T4  American Airlines Expands International Cargo Schedule  Hahn Air Appoints EVP Research & Development  United Airlines Appoints Brett J. Hart as President  Finnair to Require All Passengers to Wear Masks  Luis Gallego to Succeed Willie Walsh as CEO of IAG  Hyatt and American Offer Holidays to NYC Health + Hospitals/Elmhurst Staff  Craig Smith to Become Marriott's Group President - International  UNWTO: 72% of Countries Have Closed Borders to International Tourism  Etihad to Launch Scheduled Flights Between Melbourne and London Heathrow  Resumption of International Air Travel Requires Global Approach  Qatar Airways Giving Away 100,000 Free Tickets to Frontline Healthcare Professionals  Bombardier Wins Delhi-Meerut Regional Rapid Transit System Contract  Saab Appoints New CFO and Deputy CEO  Boeing Uses Three Dreamlifters to Transport PPE from China to USA  International Visitor Arrivals Could Fall 60-80% in 2020  Thailand to Promote Domestic Tourism First  HD Videos and Interviews  Podcasts from HD Video Interviews  Travel Trade Shows in 2020 and 2021  High-Res Picture Galleries  Travel News Asia - Latest Travel Industry News 

Subscribe to our Latest Travel News Daily Email Free of Charge by simply entering your email address to the right. You can also receive the daily news service by WhatsApp, stay updated with our RSS Feed Free Travel News RSS Feed and even add the travel news to your website. Have questions? Please read our travel news FAQ.
     
Advertising
Advertising
Copyright © 1997-2020 TravelNewsAsia.com