Asia-Pacific airlines’ profit falls slightly in 2014

ANA 767-300BCF Artwork

ANA 767-300BCF Artwork

The Association of Asia Pacific Airlines (AAPA), which includes 26 Asia-Pacific-based carriers, released preliminary figures for 2014, revealing that, in the aggregate, they operated with close to break-even status, with US$50 million net loss, compared to a net profit of US$2.2 billion in 2013. High fuel costs in the early part of the year and Asian currency volatility were the most likely factors that pushed airline profitability down, despite steady growth in air cargo traffic volumes, AAPA said.

Air cargo had an upswing in demand, which lifted the airlines’ cargo revenues to a total of $20.8 billion for the year, a 2.7 percent increase compared to 2013. International air cargo, measured in freight tonne kilometers (FTKs), increased 5.3 percent on the heels of several years of weak demand. Operating revenues for both passenger and cargo traffic combined totaled $176.6 billion for the region’s carriers, 1.9 percent more than the $173.4 billion reported for 2013.

All told, the region’s airlines carried 19 million tonnes of cargo in 2014, which represents two-fifths of global air cargo traffic.

The Asia-Pacific carriers experienced higher operating expenses in the form of aircraft operating leases, landing fees and en-route charges. With the decline in oil prices in the latter part of the year, leading to a 7.8 percent drop in global jet-fuel prices for 2014, fuel expenditures declined 1.1 percent to $60 billion, AAPA said. Fuel costs, as a percentage of overall costs, declined by 1.3 percent to 34.5 percent in 2014.

“Overall Asian carriers remain very focused on efforts to restore margins through a disciplined approach to managing costs, further productivity improvements and ongoing investments in route development and customer service enhancements,” said Andrew Herdman, AAPA general director.

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