Asia-Pacific's July traffic data shows a crisis is ahead
Tuesday, 2 September 2008: The Association of Asia Pacific Airlines (AAPA) reviewed the figures of the latest traffic data for July 2008, saying that weak results were due the slowing economic environment.
It was emphasised that “slowing economic growth is having a very serious impact on travel demand” with 12.6 million international passengers carried in Jul-08 – 0.6% lower than the same month in 2007.
On the other hand, Traffic, measured in RPK terms, grew slightly by 0.8%. International capacity continued to surpass demand, with a 2.5% year-on-year increase and 1.3% decrease to 78.4% in average international passenger load factor.
Even Asian international freight markets, which are often the indicator for the health of the global economy, are unstable with AAPA members’ international air cargo traffic falling down to 5.5% in July for the second straight month.
“The outlook for the remainder of the year remains bleak, with most of the world’s major economies now struggling to avoid recession” said Andrew Herdman, AAPA Director General.
Herdman said that airlines were cutting back non-performing routes, reducing capacity to match lower demands and cutting unnecessary costs “in order to survive the current crisis”.
However, Cathay Pacific and Singapore Airlines have more successfully defied the environment other AAPA members have faced, with strong capacity growth and maximising traffic on their hubs. AAPA members undergoing cutbacks are more generously located around the outer edges in North Asia and the South Pacific, according to the Centre for Asia Pacific Aviation.
Some of Asia’s expanding airlines seem to be hoping a global economic downfall could result in the deflation of oil prices, in which case global networks will revive and carriers will be able to rake in the revenues. However, if this doesn’t happen, capacity cuts will be inevitable.