The Asia-Pacific Aviation Association (AAPA) has flagged impending inflationary pressures and “moderateness” of business trust despite showing continuous growth since the start of the year.
AAPA Director Subhas Menon points out that the upcoming outlook for Asia-Pacific operators is “still positive,” with increasing number of reservations before and after.
However, he points out that the newly introduced tariffs by the Trump administration “indicates inflation to the horizon.” Washington in early July imposed a swept tariff on most Asia-Pacific countries,
“The easing of business trust reflects growing concerns about the global economic outlook and impacts further ahead in both air travel and freight markets,” Menon said in a comment made along with the release of AAPA traffic data in June.
This is the latest warning from the Association regarding the impact of the US government's trade stance and economic uncertainty. Over the past few months, AAPA has been warning about a “challenging” era amid issues such as supply chain crunches and growing geopolitical uncertainty.
Menon said: “Asia-Pacific careers look to adapt to market conditions regionally and globally and look to growth opportunities while paying attention to cost pressures.”
June's AAPA traffic data shows “mitigation” in traffic growth rates for the month. International RPK increased by 8%, with an 8.5% increase in passenger capacity, bringing the load rate to 0.4% point DIP.
During that month, operators in the region carried 31.2 million passengers, up 7% year-on-year.
Air freight demand rose 5.6% in June, supporting the rebound of global manufacturing activities. However, this was offset by a 7.1% increase in cargo capacity, resulting in a 0.8 percentage point reduction in cargo load coefficient.
Menon said: “The expansion highlights the strength of the regional economy that supports sustained growth in travel demand despite uncertainty in the global trade environment.”
