The rising Aviation Turbine Fuel prices do not have a direct correlation to the airfare hike, says the Association of Asia Pacific Airlines (AAPA)‘s Director General Subhas Menon. Menon was addressing a media briefing as part of AAPA’s 67th Assembly of Presidents in Singapore.

Menon added that airfares are up due to high demand and low supply in the industry. “It is a complex nexus. There is no direct correlation between airfares and fuel prices,” he said, adding, “But when costs are increasing, there is always a tendency for fares to go up, because airlines want to operate if they can make a profit.”

Safety for future

Menon also said that sustainability will be the core focus of discussions among airline leaders during the AAPA’s assembly. “Achieving sustainability goals is critical to the future success of the international air transport sector and its continuing role as an agent for social and economic development,” adding, “Extreme weather events and record temperatures in 2023 nearing global warming thresholds set by the United Nations Intergovernmental Panel on Climate Change, are a clarion call for all industry players, especially governments and fuel suppliers, to step up efforts on sustainability, and to ensure that aviation is able to achieve its net zero carbon emissions goal by 2050.”

Adding to the conversation on a possible shift from ATF to Sustainable Aviation Fuel (SAF), Menon said that there is a demand-supply issue that has to be addressed. “Before we begin, we must address the question of cost difference between SAF and fossil fuels. But we haven’t even got into that situation yet,” he said, quoting a study by Neste, a renewable diesel and jet fuel company. “The report showed that as the quantity of SAF production increased, the cost of the SAF unit was actually dropping,” he said.

Post-pandemic bounce-back

In his address, Menon noted that AAPA member carriers, which include Singapore Airlines and Air India, continue to see a strong recovery in air travel despite a dampened global economic climate. “In September 2023, the number of international air passengers in Asia Pacific reached 79 per cent of 2019 levels, behind other regions, given that borders in Asia only fully re-opened six to twelve months after the rest of the world. Nevertheless, demand is robust, with international air passenger traffic measured in revenue passenger kilometres (RPK) growing by 171 per cent in the first nine months of 2023, compared to the same period in 2022,” said AAPA in a statement.

“China, accounting for a fifth of the region’s international traffic before the pandemic, is still at only 54 per cent of 2019 levels in September 2023. Excluding China, the recovery of the region stands at a markedly higher 87 per cent. Nevertheless, the return of Chinese travellers in full force will kick off another significant wave of growth for the region and global tourism,” said Menon.

(The writer is in Singapore on the invitation of Singapore Airlines)