Asia Pacific airlines saw some good news and some bad news in its 2012 earnings report, according to an article on Air Cargo World.
The good news was that net profits grew by 6.7 percent to a total of $5.2 billion that year, after aggregate operating revenue grew by 7.6 percent to $175 billion. This was bolstered by an increase in passenger revenues, which grew by 8.5 percent.
The bad news was that revenues were dragged down by poor cargo shipping performance. Cargo revenue dropped by 3.3 percent to $21.2 billion during the year.
Andrew Herdman, Asia Pacific director general, blamed high fuel prices and weak demand in the global air cargo market due to a slow economy. In fact, according to the news source, the airline spent an additional 12.2 percent on fuel, causing its overall operational expenses to rise by 7 percent to $166.5 billion. Fuel now makes up about one-third of the airline's overall budget—non-fuel expenses, meanwhile, only increased by 4.3 percent.
Still, Herdman remained optimistic about the airline's future outlook. "Prudent capacity management maintained relatively high load factors, helping to offset the impact of persistently high fuel prices and an extended period of weak demand in the global air cargo market," he said, adding that further boosts in passenger travel is expected as growth in the Asian markets continues.
While this is indeed positive news, the airline should ensure that its cargo service does not drag down the bottom line. To do this, it should streamline its supply chain by investing in proof of condition services like CargoSnapshot. This will result in a more reliable cargo service that will make shipping customers more comfortable—and more willing to send freight by air.