APAC Airlines Reap the Benefit of Lower Oil Prices

July 2, 2015

The latest industry trends update from the International Air Transport Association (IATA) show a solid uptick in air industry profits for companies operating in the Asia-Pacific region. 

 

Given current business trends, profits are expected to increase from $1.2 billion in 2014 to $5.1 billion by the end of 2015 - that represents a four-fold increase within one year. 

 

Asia-Pacific: Airlines Post-Tax Profits, 2013-2015(f)

Source: IATA: Economic Performance of the Airline Industry, June 2015

 

The IATA explains that this increase largely stems from lower fuel costs, but also reflects the increased use of air cargo services in the Asia-Pacific region.

 

With Asia's manufacturing base becoming even more dispersed, the need for rapid supply chain solutions and coordination is becoming even more critical, with air cargo being seen as a highly efficient alternative to land- and sea-based routes.

 

In line with this trend, many hubs in the region are boosting their capacity to handle air cargo, not least Hong Kong and Singapore, which are vying for regional supremacy. This trend fits in with the 2030 trade routes previously discussed and indicates that as business links in the region become more intertwined, new solutions are going to have to be found, with air cargo likely to become even more prominent.

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