Preliminary financial performance figures released today by the Association of Asia Pacific Airlines (AAPA) revealed that Asia Pacific airlines recorded US$6.9 billion in combined net earnings in 2015, an upswing from net losses of US$1.2 billion reported for the year 2014.
The AAPA said 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 per cent and a small but none-the-less positive cargo growth.
During the year 2015, Asia Pacific airlines reported International air cargo traffic growth, expressed in freight tonne kilometres (FTK), of 2.1 per cent while international passenger traffic, measured in revenue passenger kilometre (RPK) terms, grew by 8.3 per cent.
Overall, the region’s carriers achieved aggregated operating revenues of US$166.9 billion for the calendar year, 5.6 per cent less than the US$176.8 billion in 2014. Passenger revenue fell by 5.4 per cent to US$128.4 billion, due to a decline in yields despite the growth in traffic demand. Cargo revenue declined by a significant 11.7 per cent to US$18.5 billion, as a result of the general slowdown in global trade conditions.
Combined operating expenses fell by 12.6 per cent to US$153.0 billion, driven by a 31.4 per cent decline in fuel expenditure to US$41.2 billion. Within the year, global jet fuel prices dropped significantly, by 43.5 per cent 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 per cent. Non-fuel expenditure fell by 2.7 per cent to US$111.8 billion.
Commenting on the 2015 financial results, Andrew Herdman, AAPA director general 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 per cent, compared with the 1.0 per cent 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.”
