AAPA urges governments to ‘pay close attention’ to fuel impact

High fuel prices should not ‘be the norm’, says director general Wong Hong

The Association of Asia Pacific Airlines (AAPA) has called on governments to “keep a close watch” on the impact of elevated fuel prices on airlines, which do “not have a lot of room” financially.

AAPA director general Wong Hong notes the prolonged high fuel prices are “not sustainable” in the long term – and “should not be the norm” for airlines, whose fuel bills now account for a third of total operating costs.

Wong, who was speaking at a roundtable before the AAPA’s Assembly of Presidents in Kuala Lumpur, says: “It’s very critical and very key for…governments to pay close attention and say, ‘Hey, are our airlines okay? Can they get through?’”

He also stresses that airlines do not have much financial “headroom”, given their thin operating margins.

Pointing to aviation’s “important” role, Wong adds: “How do you make sure that you don’t kill the goose that lays the eggs, right?”

More airline failures?

Asked if the persistent cost challenges would mean more airline failures, Wong says he “certainly does not want that to happen”, but warns that “if this thing continues, it’s not very difficult to think that this could really be a problem”.

Nonetheless, Wong notes there is “no single magic pill” that all governments should adopt to address the fuel challenge.

“It’s really something that I think each country would have to examine…[like] the cost structure [of] the airlines, and the airline has to examine also themselves,” he says.

His comments come as leaders of the association’s 18 member carriers convene against a backdrop of immense cost pressures and other challenges. It is Wong’s first assembly as AAPA director general, having taken helm of the industry association in April this year.

This year’s assembly is themed ‘Redefining Aviation: Growth, Resilience and Innovation’, and will be attended by more than 170 delegates from the region.

“They will review industry developments, exchange perspectives and discuss the opportunities and challenges shaping the future of aviation,” states the AAPA.

Apart from cost pressures, other topics expected to feature include sustainability, as well as supply chain issues.

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