Top Asia-Pacific airlines have suffered big losses from slowing traffic and higher fuel costs and a difficult outlook has been further clouded by the swine flu crisis, an industry group said Tuesday. "For 2008, AAPA member airlines reported an aggregate net loss of 4.3 billion dollars, in marked contrast to the solid profits earned in 2007," the Association of Asia Pacific Airlines (AAPA) said Tuesday.
Andrew Herdman, AAPA's director general, warned that the challenges faced by the aviation sector were especially severe following the swine flu outbreak. "Oil prices have fallen back, but in every other respect the challenges we are currently facing in 2009 are even tougher than last year," Herdman said. Herdman said in the first quarter, international air cargo volumes were down 25 percent, while international passenger traffic was down 11 percent.
The industry group said combined revenues for AAPA carriers reached 109 billion dollars, 6 percent higher than the 103 billion dollars reported in 2007, but failed to keep pace with higher fuel costs. Oil prices for the year averaged 97 dollars per barrel, compared to 72 dollars in 2007. As a result, the AAPA fuel bill increased by almost 10 billion dollars to 38.1 billion in 2008, accounting for 35 percent of total costs.
Since revenues failed to match the increase in fuel costs, airline profitability suffered a sharp reversal, AAPA said in a statement. Following several years of sustained growth in travel demand, the trend reversed in the second half of 2008, with figures for the full year showing AAPA international passenger numbers down 2.2 percent.