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Tuesday 28 October 2008
Asian airlines face more turbulence next year
Asia’s aviation sector was hurting from a sharp descent in passenger numbers but the full impact of a deepening global financial crisis was not likely to be felt until next year, analysts said.
Asia’s aviation sector was hurting from a sharp descent in passenger numbers but the full impact of a deepening global financial crisis was not likely to be felt until next year, analysts said.
Small carriers would be particularly vulnerable as people curtailed travel plans, they said, predicting some airlines would not survive.
“The biggest challenges right now are weakening passenger demand, particularly for first- and business-class travel, and continuing uncertainty about the global economic outlook,” said Andrew Herdman, the director general of the Association of Asia-Pacific Airlines.
“The next 12 to 18 months will be extremely difficult for airlines and some won’t survive the crisis,” said Mr Herdman, whose association represents 17 airlines in the region.
Shukor Yusof, an aviation analyst at credit rating agency Standard and Poor’s, said he expected some airlines to defer aircraft orders or return leased planes as they reduced routes and flight frequencies.
“The weakest ones will not be able to maintain the business,” he said.
The International Air Transport Association said passenger volumes for Asia-Pacific carriers fell 6.8 per cent last month, much sharper than the average 2.9 per cent decline worldwide.
Asian airlines carried 10.6 per cent less cargo last month, worse than the fall in Europe and North America, as trade volumes fell sharply, Iata said.
“The deterioration in traffic is alarmingly fast-paced and widespread,” Iata director general Giovanni Bisignani said.
“We have not seen such a decline in passenger traffic since Sars in 2003,” he said, referring to the health scare that grounded travellers in Asia.
Analysts fear that unlike during the Sars period, which lasted for a few months, the current crisis will last for a year or more.
Losses for global airlines this year may exceed Iata’s projection of US$5.2 billion, with a further US$4.1 billion in losses seen next year.
Business-class travel, a major cash-spinner for airlines, had become an early casualty of the crisis, especially with belt-tightening in the financial sector, analysts said.
Leisure travel is also suffering as tourists stay home or travel to nearer destinations.
Singapore Airlines said it carried 1.6 per cent fewer passengers last month from a year ago.
Singapore’s Changi Airport handled 2.89 million passengers last month, down 0.4 per cent from last year - the first fall in monthly traffic since February 2004.
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Asian airlines face more turbulence next year
Agence France-Presse in Singapore
27 October 2008
Asia’s aviation sector was hurting from a sharp descent in passenger numbers but the full impact of a deepening global financial crisis was not likely to be felt until next year, analysts said.
Small carriers would be particularly vulnerable as people curtailed travel plans, they said, predicting some airlines would not survive.
“The biggest challenges right now are weakening passenger demand, particularly for first- and business-class travel, and continuing uncertainty about the global economic outlook,” said Andrew Herdman, the director general of the Association of Asia-Pacific Airlines.
“The next 12 to 18 months will be extremely difficult for airlines and some won’t survive the crisis,” said Mr Herdman, whose association represents 17 airlines in the region.
Shukor Yusof, an aviation analyst at credit rating agency Standard and Poor’s, said he expected some airlines to defer aircraft orders or return leased planes as they reduced routes and flight frequencies.
“The weakest ones will not be able to maintain the business,” he said.
The International Air Transport Association said passenger volumes for Asia-Pacific carriers fell 6.8 per cent last month, much sharper than the average 2.9 per cent decline worldwide.
Asian airlines carried 10.6 per cent less cargo last month, worse than the fall in Europe and North America, as trade volumes fell sharply, Iata said.
“The deterioration in traffic is alarmingly fast-paced and widespread,” Iata director general Giovanni Bisignani said.
“We have not seen such a decline in passenger traffic since Sars in 2003,” he said, referring to the health scare that grounded travellers in Asia.
Analysts fear that unlike during the Sars period, which lasted for a few months, the current crisis will last for a year or more.
Losses for global airlines this year may exceed Iata’s projection of US$5.2 billion, with a further US$4.1 billion in losses seen next year.
Business-class travel, a major cash-spinner for airlines, had become an early casualty of the crisis, especially with belt-tightening in the financial sector, analysts said.
Leisure travel is also suffering as tourists stay home or travel to nearer destinations.
Singapore Airlines said it carried 1.6 per cent fewer passengers last month from a year ago.
Singapore’s Changi Airport handled 2.89 million passengers last month, down 0.4 per cent from last year - the first fall in monthly traffic since February 2004.
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