ANI
16 May 2019, 14:25 GMT+10
Kuala Lumpur [Malaysia], May 16 (ANI): Preliminary financial performance figures released on Thursday by the Association of Asia Pacific Airlines (AAPA) show that aggregated net earnings of Asia Pacific airlines halved in 2018 to 4.7 billion dollars from 9.6 billion dollars recorded in the previous year.
Continued expansion in the global economy underpinned further growth in air passenger and air cargo markets. But airlines faced an increasingly challenging operating environment marked by significantly higher jet fuel prices, adverse currency movements and rising pressures on non-fuel cost items.
Overall, international passenger traffic in revenue passenger kilometre terms (RPK) grew by a robust 6.9 per cent in 2018, stimulated by rising incomes, further expansion of airline networks and widespread availability of competitive airfares.
International air cargo traffic as measured in freight tonne kilometres (FTK) slowed to a 2.2 per cent increase for the year, as uncertainties stemming from unresolved international trade disputes adversely affected business confidence and levels of export activity.
Collectively, the region's carriers achieved operating revenues totalling 204.7 billion dollars in 2018, a 10.4 per cent increase compared to the 185.4 billion dollars registered in the previous year. Passenger revenue rose by 10.4 per cent to 159 billion dollars, driven by the solid growth in passenger demand and slightly higher average airfares.
Passenger yields recorded a 3.1 per cent rise to 8.1 cents per RPK after several years of decline. Despite slower growth in air cargo demand, cargo revenue increased significantly by 11.5 per cent to 21.2 billion dollars with 8.9 per cent increase in cargo yields to 27.1 cents per FTK.
Meanwhile, operating expenses grew by 12.5 per cent to an aggregate total of 194.6 billion dollars in 2018. This was driven by a significant 27.5 per cent rise in fuel costs to 54.5 billion dollars, in tandem with the 29.8 per cent jump in global jet fuel prices to an average 85 dollars per barrel.
Consequently, the share of fuel expenditure as a percentage of total operating expenses rose by 3.3 percentage points to 28 per cent. Non-fuel expenditure increased by 7.6 per cent to 140.1 billion dollars, driven by higher staff costs as well as landing fees and en-route charges.
"Asian airlines are operating in highly competitive markets, and were not able to pass on the full cost impact of significantly higher fuel prices we saw in 2018," said AAPA Director General Andrew Herdman.
Consequently, overall operating margins narrowed to 4.9 per cent for the year from 6.7 per cent in 2017. After extraordinary items, which included foreign exchange losses for a number of carriers, aggregate net earnings fell to 4.7 billion dollars in 2018.
As an indication of the highly competitive nature of the airline business, this represents an average profit level of just under 5 dollars per passenger flown, said Herdman.
"Asia Pacific airlines continue to face significant headwinds in the form of persistent cost pressures, stiff competition as well as further volatility in oil and currency markets. Whilst air passenger markets remain relatively resilient, the weak sentiment surrounding air cargo markets is a warning signal that trade disputes are doing real damage to the economy and could further undermine global growth prospects going forward," he said.
(ANI)Get a daily dose of Canada Standard news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Canada Standard.
More InformationIn the past month alone, 23 Israeli soldiers have been killed in Gaza—three more than the number of remaining living hostages held...
LONDON, U.K.: At least 13 people are believed to have taken their own lives as a result of the U.K.'s Post Office scandal, in which...
WASHINGTON, D.C.: Travelers at U.S. airports will no longer need to remove their shoes during security screenings, Department of Homeland...
WASHINGTON, D.C.: An elaborate impersonation scheme involving artificial intelligence targeted senior U.S. and foreign officials in...
SLUBICE, Poland: Poland reinstated border controls with Germany and Lithuania on July 7, following Germany's earlier reintroduction...
WASHINGTON, D.C.: After months of warnings from former federal officials and weather experts, the deadly flash floods that struck the...
(Photo credit: Wendell Cruz-Imagn Images) Cody Bellinger hit three homers for the first time in his career and drove in six runs,...
(Photo credit: Daniel Kucin Jr.-Imagn Images) Baltimore starter Dean Kremer held the visiting Miami Marlins to three singles across...
(Photo credit: Dale Zanine-Imagn Images) Matt Olson will replace Atlanta Braves teammate and fellow All-Star Ronald Acuna Jr. in...
(Photo credit: David Banks-Imagn Images) Chicago Bears general manager Ryan Poles has come to terms on a three-year contract extension...
(Photo credit: Kelley L Cox-Imagn Images) A pair of best-of-three tiebreakers helped determine the final order of Groups C and D...
(Photo credit: David Butler II-Imagn Images) Boston Red Sox starting pitcher Hunter Dobbins exited Friday night's game against the...