HIGHER oil prices and a weak cargo market are being blamed for the 47 per cent drop profits among Asia Pacific region airlines last year.
The combined net profits of carriers plummeted to US$4.8bn, according to the Association of Asia Pacific Airlines (AAPA).
The body says the total revenue for its 17 members rose 10 per cent from a year ago to hit $162m.
However, it stated this represented just a three per cent profit margin and a poor return on invested capital.
The association also reveals cargo revenues fell 1.4 per cent to $22bn last year, but operating expenses rose at a faster rate of 15 per cent to $155bn – largely due to a 28 per cent hike in fuel costs to $52bn.
“Asia Pacific carriers continued to outperform the overall industry in 2011, with continued growth in passenger numbers, but profit margins were squeezed by high oil prices, as well as the impact of a weak air cargo market,” explains AAPA director general Andrew Herdman.
He also noted that airlines were tightening belts cutting costs and routes.