Chinese carriers have reported concerning declines in load factors last month, with the slowdown preceding the
But despite these factors, it is evident that the Chinese economy is slowing, and with it, demand for travel. The recent increases in fuel surcharges have led to a 50 percent rise in the past month, and this will cause further difficulty in the sector.
The recent cost-cutting strategies of
Load factor for Singapore Airlines has similarly declined, falling 3.2 ppts to 79.2 percent, after recently expanding capacity by 9.5 percent.
Despite the downturn in the area, Cathay Pacific recorded a 16 percent year on year increase in June, taking their growth for the year to date to 14.3 percent.
“We have added a lot of capacity since last year, particularly to
Whilst recognising the impressive growth of the
In a recent statement, the Association of Asia Pacific Airlines expressed concern regarding the cost of travel, although air traffic in the area was remaining relatively stable, with Director General Andrew Herdman warning of “worrying signs that the global economy may be reaching a tipping point.”
He pictured a future where astronomical oil prices were “the new normal,” claiming that such a situation would have “far-reaching implications for the structure of the industry.”
The effect of such costs becoming the norm would also impact airports and other aviation service providers.
His motive was not to incite panic, but to encourage the industry to co-operate to improve efficiency, and he urged carriers to recognise that they would be required to make some tough decisions in the near future. Some of the strategic decisions which may be required of airlines include the cutting back of unprofitable routes, retiring of older equipment, reviewing staffing levels and maximising the use of newer, more fuel-efficient aircraft.