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Airlines continue to struggle due to collapse of international travel

The Association of Asia Pacific Airlines (AAPA) says that its preliminary traffic results for 2021 show the “continued decimation in international air passenger demand for the region’s airlines”.

In summary, it noted that “tight border restrictions implemented in response to the prolonged COVID-19 pandemic dashed hopes of recovery in air travel markets”.

Overall, the 16.7 million international passengers carried in the year 2021 represented just 4.4% of the volumes recorded in pre-pandemic 2019, whilst offered seat capacity averaged 13.8% of the levels registered in 2019.

For the full year, it notes that the international passenger load factor was “a paltry 32%”, underscoring the ongoing challenging conditions faced by the region’s airlines in the passenger sector.

On the other hand, international air cargo markets saw encouraging growth over the course of the year.

With major manufacturing hubs located in the region, Asia-Pacific airlines benefitted from buoyant export demand for consumer and intermediate goods. In addition, supply chain bottlenecks at container shipping ports boosted demand for shipments by air.

For the full year 2021, international air cargo demand as measured in freight tonne kilometres (FTK) registered a robust 20.1% year-on-year increase, after posting a 15.4% annual decline in the year 2020 when the widening spread of the COVID-19 pandemic severely curbed economic growth across the world.

Compared to the growth in demand, offered freight capacity expanded at a markedly slower pace of 8.1% in 2021, as the drastically reduced international passenger operations adversely affected bellyhold cargo capacity, although this was partly mitigated by the deployment of cargo-only passenger flights and increased freighter operations.

As a result, it says, international freight load factors climbed 7.4 percentage points to 74.3%, the highest annual average on record.

Reflecting on a tough year, AAPA director general, Subhas Menon, said: “For a second year running international passenger travel remained severely suppressed, as a result of strict border measures imposed throughout the region and elsewhere.

“It is the worst crisis the region’s airlines have ever faced in terms of duration and depth.

“As vaccination programmes got under way, some governments began to ease travel restrictions in the later part of the year, supporting some improvement in the number of international passengers carried in December to 7.6% of 2019 volumes. However, the emergence of the Omicron variant has put the brakes on recovery.”

He added: “The air cargo business segment has been a silver lining for the aviation industry, with strong demand helping to partially mitigate the loss in passenger revenue. In FTK terms, international air cargo demand for the year 2021 has recovered to just above pre-crisis levels.

“Overall, whilst 2021 will be remembered as one of the most challenging years for the region’s airlines, it has also demonstrated the industry’s extraordinary resilience as airlines continue to play a vital role in connecting people and transporting essential goods across the world.

“For meaningful recovery to take place, border restrictions would need to be eased on a consistent basis, and the current multi-layered travel requirements streamlined and simplified for travellers. Collaboration among aviation stakeholders and governments is key to the safe and sustained resumption of air travel.”

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