Stronger yields and revenue growth outpacing expenditure have been common themes among major Asia-Pacific carriers
Quarterly, half-yearly and fiscal-year results for Asia-Pacific carriers have generally been coming in strong, with profit records broken by many.
Australia's Qantas Airways has been one of the star performers, recently reporting record earnings for the financial year to June as demand remained strong and cost-cutting initiatives continued to produce positive results. Qantas says there was "a significant improvement in international operations and continuing improvement in domestic operations, driven by high yields and loads".
Air New Zealand also reported a sound result for the year to June, with a 123% jump in net profit as it benefited from restructuring initiatives, stronger demand and improved yields. Looking ahead, it says it has "strong forward bookings" and expects another solid financial year, provided "the operating environment does not change materially".
Record profits
Cathay Pacific Airways was another solid performer, reporting more than 50% growth in net profit for the six months to June. Net profit hit a record high and Cathay says the results were "largely driven by strong demand and rising yields on the passenger side". Cargo operations were weaker as intense competition impacted most Asian carriers with large freight businesses, but Cathay says it is not concerned and expects demand to pick up.
The Association of Asia Pacific Airlines says healthier cargo traffic growth in July "could suggest an improving trend as we move into the traditionally stronger second half of the year".
Singapore Airlines reported underlying growth in net profit for the first quarter to June when excluding a one-off gain booked last year from asset sales. SIA says demand for the months ahead remains strong "especially in the premium cabins". Its cargo division has suffered, however, and recorded a sharp drop in operating profit in the first quarter.
Once-troubled Malaysia Airlines recorded improved earnings, largely on the back of gains from restructuring initiatives and improved market conditions. It booked its fourth consecutive quarterly profit in the second quarter, and was in the black both at operating and net level.
Malaysia's AirAsia meanwhile reported more than 100% growth in both net profit and earnings before interest and tax for the financial year to June, cementing its status as the largest and best-performing low-cost airline in Asia.
Good news in Japan
Positive news also came out of Japan, where All Nippon Airways recorded profit growth and Japan Airlines reported sharply reduced losses. Rival JAL, which has been struggling to restructure operations, reported reduced losses for the first quarter. Total operating revenue dropped but operating costs fell 4.5%, and it is now more upbeat about its prospects for successful restructuring.
Philippine Airlines reported better-than-expected earnings for the year to March and expects to emerge from creditor protection by the end of the year.
It was a mixed picture in South Korea with Asiana Airlines recording growth in net profit for the three months to June, while Korean Air suffered a steep net loss after it booked a charge related to a $300 million US price-fixing fine. However, operating profit rose 9% as demand was strong and revenue increased.
Taiwan's China Airlines also fell into the red at net level in the first half, largely due to a loss booked on the sale of an aircraft.
It was a more positive picture in mainland China, with Air China recording solid results, China Southern Airlines returning to profitability and China Eastern Airlines sharply reducing losses in the first half.
Source: Airline Business
