Asia Pacific airlines returned to financial growth in 2015, according to preliminary performance figures released today by the Association of Asia Pacific Airlines (AAPA).
AAPA said that the region’s carriers recorded US$6.9 billion in combined net earnings in 2015, an upswing from net losses of US$1.2 billion in 2014. The strong results were underpinned by sustained growth in passenger markets, lower fuel prices and operating efficiencies, including a record high passenger load factor of 78.4%.
However, the region’s carriers posted a -5.6% fall in aggregated operating revenues to US$166.9 billion for the calendar year. Passenger revenue fell by -5.4% to US$128.4 billion, due to a decline in yields despite the growth in traffic demand.
During the year 2015, Asia Pacific airlines registered an +8.3% increase in international passenger traffic, measured in revenue passenger kilometre (RPK) terms.
Softer yields drove a decline in revenues for the region’s carriers but heavy fuel savings led to a sharp upturn in profitability |
Combined operating expenses fell by -12.6% to US$153.0 billion, driven by a -31.4% decline in fuel expenditure to US$41.2 billion. Within the year, global jet fuel prices dropped by a whopping -43.5% to an average of US$64 per barrel. As a result, the share of fuel expenditure as a percentage of total operating costs declined by 7.4 percentage points to 27.0%. Non-fuel expenditure fell by 2.7% to US$111.8 billion.
AAPA Director General Andrew Herdman, said, “Asia Pacific carriers saw a welcome return to profitability in 2015, after suffering aggregate losses in the previous year. The region’s carriers registered a significant operating margin of 8.3%, compared with the 1.0% margin achieved in 2014.
“Overall, Asian airlines benefitted from strong passenger demand and the significant fall in oil prices, although the financial impact on individual carriers would also depend on currency volatility and variations in individual fuel hedging policies, amongst other factors.”
Looking ahead, Herdman added, “Asian carriers are encouraged by the sustained growth in passenger demand, but continue to face a challenging operating environment characterised by intense competition, cost pressures and volatile currency markets.
“Air cargo markets remain weak as a result of the slowdown in global trade. Nevertheless, taking a positive view of the future, Asia Pacific airlines are continuously reviewing their fleet and network development plans in line with evolving market trends, and introducing new customer service initiatives, whilst continuing to focus on disciplined cost management efforts.”
