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Asia airlines industry may fly low for next 2 years

Posted on: April 1, 2009

By P. Vijian Bernama – Tuesday, March 31

HYDERABAD, March 31 (Bernama) — The once thriving Asian airline industry will grapple with a bleak future for the next two years as premium travellers continue to drop, driving down demand and revenue, triggered by the global economic meltdown, say industry experts.

With international trade and financial climate remaining uncertain, cargo traffic and passenger market are shrinking dramatically worldwide, thus impacting Asian airline operators directly.

“The Asian markets are going to be very negatively hit because premium travellers are down significantly. Most of the premium carriers like Singapore Airlines, Malaysia Airlines, Thai and Cathay Pacific, their premium travellers are significantly down,” Kapil Kaul, chief executive of the Centre for Asia Pacific Aviation (India sub-continent/Middle East) told Bernama.

“Business class travellers were down by 16 percent last month. Traffic within Asia was down by 20 percent and Asia to Europe numbers were also down by 20 percent,” he said.

Speaking at the 7th Routes Asia Forum in Hyderabad, industry players, comprising both airport operators and airline owners, are pessimistic with current economic lull looming large and fear the worse is yet to come for the sector.

Earlier this month, the International Air Transport Association (IATA) forecast that global airlines are expected to lose nearly RM17 billion (US$4.7 billion) this year due to the gloomy economic conditions.

“There is a downward sentiment in terms of international trade and business across Asia. We believe airlines across Asia need to be looking at capacity reduction quite quickly and address the issue of overcapacity,” said Kaul. — BERNAMA



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