SINGAPORE – Association of Asia Pacific Airlines director general Andrew Herdman says there are signs of a “tentative†recovery among member airlines but he has warned that it is much too early to call an end to the pain being suffered by the industry.
AAPA international passenger numbers in October were still three percent below the levels of October last year and while load factor lifted 2.8 percentage points to 75.6 percent for the month, this was largely achieved by a 6.5 percent reduction in seat capacity.
“Yields are still very weak, to put it mildly,†said Herdman.
“There is airline discounting in all cabins, and there are not many times when you see discounting in premium cabins, as we have seen recently. Any growth in premium business has come at a cost in yield.â€
Herdman said revenue among Asian airlines was down 25 percent this year and losses were expected to be similar to those in 2008 – US$4.3 billion.
“Effectively we have lost two years of growth,†he added.
Herdman said the global recovery appeared to be led by Asian markets, but the only countries to benefit were those with strong domestic economies such as China and Indonesia.
“What recovery there has been has not yet impacted Asian airlines,†he said.
AAPA leaders are expecting to steer a difficult course over the next year, “both tightly managing costs and closely monitoring what still appears to be a fragile economic recoveryâ€, Herdman said.
He said he was especially concerned about the macro effect of the rise in the price of oil to around US$80 per barrel and the potential impact that had on global economic recovery.
