Air passenger and cargo volume outlook in Asia-Pacific is uncertain this year due to the outbreak of the novel coronavirus (nCov) as well the precarious global economy and the still unresolved trade dispute between the US and China, according to the Association of Asia Pacific Airlines (AAPA).
The country’s three airlines Philippines Airlines, Cebu Pacific and AirAsia Philippines have all suspended flights to and from China and its special administrative regions (SARs) Hong Kong and Macau to manage the risks of nCoV.
The three count China as a big market and a prolonged flights suspension will surely have an impact.
Charo Logarta, Cebu Pacific director for corporate communications, said the carrier flies 232 times weekly between Philippines and mainland China, Macau, Hong Kong routes that account for 9 percent of its total flights.
Cebu Pacific has suspended flights between the Philippines and Macau and Hong Kong until February 29.
All other flights to and from the Philippines and Mainland China (Beijing, Shanghai, Xiamen, Guangzhou, Shenzen) are suspended until March 29.
Cielo Villaluna, PAL spokesperson, said airline averages 140 flights to and from China per week or an equivalent of 18,165 seats for outbound Manila flights to China.
“Our China operations contribute 10 percent of total company revenue” Villaluna said.
As of end 2018, PAL said bulk of its revenues for international operation came from Asia and Australia which comprised of 39.9 percent.
PAL cancelled flights between Manila and the following points in Greater China: Beijing, Hong Kong, Guangzhou, Shanghai, Xiamen, Quanzhou and Macau.
The Civil Aeronautics Board said the move to cancel flights aims to protect the public by helping contain and neutralize the spread of nCoV.
The directive temporarily bans the entry of any person of any nationality, except Filipino citizens and holders of permanent resident visa issued by the Philippine government, who come directly from Mainland China and its SARs or who had been to China and its SARs within 14 days prior to their arrival in the Philippines.
The directive likewise bans Filipinos from traveling to mainland China and its SARs, and requires a 14-day home-quarantine for Filipinos and permanent resident visa holders who come from Mainland China and its SARs.
“The general outlook for 2020 was already clouded by uncertainty over prospects for the global economy and still unresolved trade disputes. The recent 2019-nCoV outbreak has now been categorized by the World Health Organization as a Public Health Emergency of International Concern,” said Andrew Herdman, AAPA director general.
Herdman said the related imposition of travel restrictions and widespread public concern have led to significant falls in demand for air travel on routes to/from and within China, and corresponding adjustments to airline schedules.
In 2019, passenger demand remained stable whilst cargo volumes fell amid global economic slowdown, according to AAPA.
In aggregate, the region’s airlines registered a 4.2 percent increase in the number of international passengers carried to a combined 375.5 million in 2019.
Measured in revenue passenger kilometers (RPK), demand grew by 4.1 percent, reflecting the relative strength of both short and long haul travel markets.
After accounting for a 3.7 percent increase in available seat capacity, the average international passenger load factor edged 0.3 percentage points higher to 80.9 percent for the year.
International air cargo demand as measured in freight ton kilometers (FTK) fell by 5.1 percent in 2019, following the 1.6 percent decline registered in the previous year.
Offered freight capacity grew by 1.3 percent, resulting in a 3.9 percentage point drop in the average international freight load factor to 59.5 percent for the year.
“Asian airlines saw combined international passenger numbers increase by a relatively moderate 4.2 percent for the year, compared with the stronger annual growth rates seen in preceding years. Whilst increased geopolitical and trade tensions may have affected business confidence levels and overall traffic demand, new routes and frequencies providing more options to travellers as well as attractive air fares continued to drive passenger numbers higher in 2019, supported by ongoing regional economic expansion,”
Herdman said.
Air cargo markets experienced a very challenging 2019, with the 5.1 percent drop in demand marking the steepest fall since the global financial crisis. Declines in new export orders throughout the course of the year led to lower demand for air shipments.
“Overall, in 2019, Asian airlines faced an intensely competitive operating environment, with downward pressure on yields and profitability, only partially alleviated by the 7.2 percent fall in global jet fuel prices to an average of $79 per barrel for the year.” he added.
