October 12th, 2021.
The global economy is rapidly improving, assisted by governments and central banks, and the progress in vaccinations. The global economy is now forecasted to grow 6.0 percent in 2021 and 4.9 percent in 2022 leaving room for optimism and a faster recovery from the pandemic.
While improving market conditions has enabled ALAS Group to increase the activity level for Q2 and Q3, it was the effectiveness of our restructuring program and our focus on capturing maximum value from every business unit that underwrote our increased global utilization.
The output of our efforts in the second and third quarter is now just above last year’s pre-pandemic level. Q4 travel bookings shows visible improvements compared to Q4 2020, however, still well below pre-crisis levels. Global consumer markets are rapidly recovering and consumer demands are rebounding indicating post-crisis optimism. However, the rapid increase in demand, boosted by recovering economies and global backlogs, has pushed up prices on key commodities such as oil and metals. Tensions across global supply chains caused by the pandemic have added to cost pressures creating commodity price bubbles. At the same time, shipping costs have increased sharply, which has negatively impacted global prices and market volatility.
In Q2 the global RPK (revenue passenger kilometer) took another hit, where we saw a serious decline in passenger revenue on 61% compared to the pre-crisis levels. This impacted our earnings position and financial position, where we expected to see a stronger recovery in the market. Continuous global travel restrictions and large differences in vaccination rates between countries have added to the unevenness of the recovery, slowing our economic expectations down for the travel industry.
While RPK levels are at an all-time low, global freight services has seen a CTK increase (capacity ton kilometer) on 7.7% which has affected our IRL (inventory request level) and freight operations positively, meeting our growth targets for this specific segment.
Our pinnacle for Q2, and an important assignment for the Group, was assisting the USAID program with medical supplies from America to the Indian subcontinent. In cooperation with the Orlando, Florida based National Airlines and local government officials, our team in Asia were instrumental in supporting their Boeing 747-400’s with operational planning and execution, carrying crucial medical supplies to help fight the pandemic in the region. Another successful operation on the Indian subcontinent for the Group and an important achievement in fighting the coronavirus.
Looking at our green-tech developments, we are continuing to grow our renewable business in Southeast Asia, together with key stakeholders from the public and private sector, increasing our PPP (Public Private Partnership) footprint in the region. Expanding our renewable capabilities will play an increasingly important role for the Group in the future, accumulating experience and knowledge in the field of green technology and innovation, plus intensifying the company’s sustainability profile and our global green-to-market approach.
Our restructuring program, including our updated financial targets and sustainability targets, outlined late last year, along with the recovering global economy, has positively affected the road ahead for the Group. We will continue to focus our growth on strategic and organic expansion, concentrating our efforts on solid and well-defined areas, minimizing costs and increasing profits.
Dustin Paul Wilden
Chairman of the Group