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Asia Pacific airlines earn more in 2012, buoyed by passenger markets

Asia Pacific airlines earned 6.7 percent more in combined net profits in 2012 than in 2011, according to preliminary figures released Tuesday by the Association of Asia Pacific Airlines.

Asia Pacific airlines achieved US$5.2 billion in combined net profits in 2012; in 2011, it was US$0.4 billion less. Sustained growth in passenger markets helped mitigate a challenging operating environment marked by weak air cargo markets and high jet fuel prices.

Aggregate operating revenue for the region's carriers grew by 7.6 percent to US$175.0 billion. Cargo revenues dropped by 3.3 percent to US$21.2 billion, while passenger revenues grew by 8.5 percent.

Asian airlines saw a 3.4 percent decline in international cargo traffic in freight tonne kilometers, while international passenger traffic jumped by 5.8 percent.

"Asia Pacific airlines in general recorded a modest improvement in their overall financial performance for 2012, underpinned by sustained economic growth driving further growth in passenger demand in both business and leisure travel markets, particularly in the Asia Pacific region,” Andrew Herdman, AAPA director general, said. “Prudent capacity management maintained relatively high load factors, helping to offset the impact of persistently high fuel prices and an extended period of weak demand in the global air cargo market."

Operating expenses went up by 7 percent to US$166.5 billion. The main cause of the increase was a 12.2-percent jump in fuel expenditure. The share of fuel expenditure as a percentage of total operating costs rose to 35.3 percent in 2012, up 1.6 percentage points from 2011. Non-fuel expenditures grew by 4.3 percent.

"With consumer and business confidence both holding up relatively well in the Asia Pacific region, we are seeing further growth in passenger numbers this year,” Herdman said. “Overall, Asian airlines are expected to remain at the forefront in promoting further development of the global airline industry, with continued investments in fleet expansion and customer service innovation."