IATA economist projects growth in Asia Pacific cargo traffic in 2013

AIR passenger traffic in the Asia Pacific (APAC) region has been growing and is set to rise next year driven by intra-regional traffic, provided there's no drastic fuel price hikes, says International Air Transport Association (IATA) chief economist Brian Pearce.

The air cargo industry, on the other hand, is not faring so well in the region due to the economic climate in the US and Europe.

"Air cargo is a very important business for Asia which has become the manufacturing centre for the world. However, since the emergence of economic issues in the US and Europe, demand for Asia's exports has decreased and this had a notable impact on air cargo," said Mr Pearce.

"In response to this trend, we have seen a lot of new trade routes being opened up, particularly between China and Africa, and also within the APAC region we are seeing some growth. Overall 2013 is expected to be a much stronger year for the industry and air cargo is also expected to show some growth," he noted.

Mr Pearce further observed that as the APAC region's economies and aviation industries continued their current growth trajectories, the aviation industry within the region would also start to see some insulation from economic shocks generated in the West. Ultimately, though, due to the nature of the aviation industry, total insulation would be impossible. Energy costs will continue to be the key determining factor in the profitability of the aviation industry, which already sees as much as 30 per cent of its operating costs arising out of fuel costs alone.

"Carriers have responded by looking to become more fuel-efficient, and this has succeeded to an extent. Today we can see that aircraft are twice as efficient as they were 15 years ago," he said.