Association of Asia Pacific Airlines (AAPA) director general Subhas Menon said industry recovery from the coronavirus (COVID-19) could take years as hopes of a quick recovery has effectively faded.
Asia Pacific airlines, in particular, saw its profitability decline as early as 2019 with earnings affected by the global trade tensions last year. AAPA said Asia Pacific airlines saw its combined net income drop by 25% from 2018.
Profitability was also impacted by intense competition adding downward pressure on yields, while air cargo demand was significantly affected by the escalation of trade disputes, including tit-for-tat trade tariffs between the US and China.
AAPA said in terms of international air cargo traffic as measured in freight tonne-kilometres (FTK), volumes declined by 5% for the year, marking the steepest fall since the global financial crisis.
Asian airlines bore the brunt of the escalation in trade tensions, as they collectively account for over one-third of global air cargo traffic. AAPA said in a statement that the region's carriers saw cargo revenue fell significantly, by 14.5% to a combined total of US$18.4 billion in 2019, reversing the double-digit gains achieved in the preceding year.
"Air cargo markets were adversely affected by a combination of lower demand and corresponding downward pressure on freight rates," AAPA said.
Fight for survival
Subhas Menon, AAPA director-general, said the ongoing coronavirus crisis is also pushing airlines worldwide to fight for their very survival "due to the collapse in demand caused by the coronavirus pandemic."
"Hopes of a V-shaped recovery have waned. It may take years for the industry to recover to pre-COVID levels," Menon said.
He noted however that an early restart of aviation will spur global recovery from the current crisis.
