sia Pacific-based airlines, including Thai Airways International (THAI), saw their earnings plunge 47 percent last year due to the surge in oil prices and a weak cargo market.
Preliminary figures released by the Association of Asia Pacific Airlines (AAPA) note the region’s 23 airlines recorded an aggregate of $4.8 billion in net profits for 2011, down from $9 billion the previous year.
Combined revenues of those airlines climbed 10 percent to $162 billion, compared to $147 billion in 2010, said the region’s airline business grouping based in Kuala Lumpur.
Passenger revenues grew by 15 percent to $121 billion, but cargo revenues slipped by 1.4 percent to $22 billion in 2011.
Operating expenses increased by 15 percent to $155 billion, spurred by a 28 percent jump in fuel costs to $52 billion.
The share of fuel costs as a percentage of total expenses rose by four percentage points to 34 percent. Non-fuel expenditures grew by 9.6 percent to $103 billion.
Asia Pacific airlines’ international passenger traffic, measured in revenue passenger kilometre terms, increased by 3.7 percent, whereas international cargo traffic, expressed in freight tonne kilometres, dropped by 4.8 percent.
The 2011 earnings represent a 3 percent profit margin and a poor return on invested capital, said AAPA.
THAI and Malaysia Airlines actually finished in the red, with respective losses of 10.19 billion baht and RM2.52 billion.
Many of those who profited, such as Singapore Airlines and Cathay Pacific, saw lower earnings.
AAPA director-general Andrew Herdman said Asia Pacific carriers continued to outperform the overall global airline industry in 2011, with continued growth in passenger numbers, but profit margins were squeezed by high oil prices and a weak cargo market.
Global airlines still face a number of significant challenges in 2012, including persistently high oil prices and slower economic growth in major developed markets.
However Asian airlines have benefited this year from stronger economic growth in the region, leading to growth in international passenger numbers, though air cargo markets remain weak.
Airlines are responding by carefully matching capacity to changes in demand, and maintaining strict cost controls throughout the business, he said.