Airlines in Asia-Pacific are on a steady, if not spectacular, course that will reach 100% of pre-COVID levels when it does. In May, the upward trend continued, with passenger numbers growing by 5.4% compared to April, but still a long way short of where they were in May 2019.
It’s a long way to 100% recovery
According to the Association of Asia Pacific Airlines (AAPA), airlines in the region carried 21.4 million passengers in May, nearly three times the 7.3 million in May last year. These are positive numbers and mirror the pattern this year but are still just 70% of the 30.4 million passengers carried in May 2019. From January to May this year, the airlines carried 95.93 million, while in the same period in 2019 that was 155.1 million, giving a 61% recovery in 2023 over those five months.
Photo: Markus Mainka/Shutterstock
AAPA Director General Subhas Menon said that strong travel appetite continued to spur recovery in passenger demand which grew by nearly three times in May, “with both premium and leisure segments on the rise.”
“Overall, the outlook for the airlines remains positive, with the recent moderation in oil prices providing some relief to operating expenditure even though the industry will continue to face inflationary cost pressures.
“Against this background, the region’s airlines are focussing their attention on disciplined cost management throughout the business while maintaining excellent safety and customer service standards.”
AAPA is the trade association for scheduled airlines based in Asia-Pacific, and every month it correlates traffic data from 40 Asia-Pacific based airlines. Among those airlines, which include full-service and low-cost carriers, contributing data are China Eastern, Qantas, Air New Zealand, Cathay Pacific, Singapore Airlines, Thai Airways, AirAsia, Cebu Pacific, IndiGo, EVA Air, Philippine Airlines and China Airlines.
Photo: PANUMAS PIX/Shutterstock
As well as passenger numbers, airlines live and breathe by the load factor or the percentage of seats sold on each flight. In May this year, the load factor was 78%, compared to 72% in 2022 and 78% in 2019. So while the region’s airlines are carrying just 70% of the 2019 traffic, they have adjusted their available capacity accordingly, which is how they are keeping load factors at respectable levels this year. Capacity, as measured by available seat kilometers (ASKs), was 446.1 million in the first five months of 2023, compared to 164 million last year and 703.4 million in 2019.
Cargo is a concern
After the last few years of booming cargo markets, it seems, at least in Asia-Pacific, that market is getting a lot tougher. For most of this year, AAPA has been reporting slowing demand and speaking about May, it said that subdued demand conditions, driven by weak business confidence levels, adversely impacted air cargo markets.
Photo: Markus Mainka | Shutterstock
In freight tonne kilometers (FTK) terms, air cargo demand fell by 7% year on year while offered freight capacity rose 6%. Adding capacity while demand is dropping is not good business, and in May, it generated an 8.5% decline in the average international freight load factor, dragging it down to 60%. Interestingly in May 2019 the freight load factor was 59%, so it seems not a lot has changed after all in the air cargo sector. Menon commented:
“Air cargo demand remained soft, reflecting the prevailing weak global economic conditions and in particular, the slowdown in the manufacturing sector. Trade tensions are likely to weigh down on cargo markets for some time to come, whereas air travel demand is expected to demonstrate resilience in spite of the headwinds in the external environment.”
How are you seeing demand with airlines in Asia-Pacific? Let us know in the comments.