Passengers traffic for Asian legacy carriers collapse


The release of half-year results for Asia Pacific Airlines Association (AAPA), which comprises 16 major airlines in the region, has seen a dramatic decrease in traffic in June. Air carriers transported two million passengers less last month, translating to a total of 9.88 million compared to 11.83 million a year earlier. Load factor was down by 5.7 points to 70.5 percent, despite a 9.2 percent reduction in available seat capacity. For the first six months of 2009, total passengers traffic felt by 11.5 percent to reach 63.8 million compared to 72.1 million during the same period of 2008.

The Asia-Pacific region seems more affected than the rest of the world. Not only because of the worldwide recession, but also because of the psychological reluctance to travel generated by a perceived lack of safety at some destinations as well as the health risk from swine flu or H1N1 virus. According to latest numbers, the pandemic has translated into 6,776 H1N1 cases in Thailand, 2,902 in Hong Kong, 1,772 in China PRC, 921 in Malaysia, 440 in Vietnam and 239 in Indonesia [figures as of July 22]. Despite the fact that over 96 percent of the cases are non-life threatening, travel patterns show an impact.

According to Andrew Herdman, AAPA director general, “the trading environment for Asia Pacific airlines remains extremely challenging, with further recent declines in passenger demand reflecting ongoing economic weakness as well as public anxieties over government initiatives related to the widening swine flu pandemic. As a result, we still haven’t seen a floor in terms of overall passenger demand.”

Miserable performances of large Asian carriers are, however, balanced by bright outlook for low-cost airlines in the region. Tiger Airways recently reported a 7.6 percent year-on-year increase in traffic for the first quarter of 2009 with seat capacity increasing by 11.4 percent capacity increase. And AirAsia group continues to expand aggressively. Passenger traffic rose from January to March by 21 percent compared to 2008 with total revenues rocketing by 33 percent. AirAsia is now the region’s sixth largest carrier the second largest by 2013, according to CAPA, the Center for Asia Pacific Aviation. In the Philippines, Cebu Pacific announced on July 22 that it transported 33 percent more passengers during the first half of 2008 with revenues up by 20 percent. The airline expects to make a net profit by year end and could transport over 15 million passengers annually by 2015.