<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published March 20, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Forecast of US$1.1b loss for Asian airlines too upbeat: Iata
Regulators urged to change mindset on aviation ownership and access rules
By VEN SREENIVASAN
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(SINGAPORE) The global aviation industry's numbers are bad, and the Asian numbers are a nightmare, International Air Transport Association (Iata) boss Giovanni Bisignani said yesterday.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>Bleak numbers: Airlines cut capacity by 4.3% in January but passenger traffic fell 8.4% and cargo was down an unprecedented 28.1% </TD></TR></TBODY></TABLE>'In December we projected a US$1.1 billion loss for Asia's carriers - the worst performance in the industry,' he told the Malaysian International Chamber of Commerce in Kuala Lumpur. But the shocking slowdown in Japan, the region's largest market, and China, the region's fastest-growing, makes this forecast look optimistic.
'January passenger traffic in the region was down 8.4 per cent. Capacity cuts at 4.3 per cent were aggressive - but business is disappearing faster.
'Cargo was down an unprecedented 28.1 per cent. And as air cargo accounts for 35 per cent of the value of goods traded internationally, this is bad news for the region and the global economy. World trade is falling off a cliff.'
Asia-Pacific carriers are the biggest players in the global air freight market, accounting for 44 per cent of it.
Still, Mr Bisignani believes that despite the current recession, the Asia-Pacific will become the world's biggest single aviation market in a few years.
'Air transport is the lifeblood of the global economy,' he said. 'Iata's member airlines help support 32 million jobs and US$3.5 trillion in economic activity.'
Mr Bisignani, visiting KL ahead of the 65th Iata annual general meeting and World Air Transport Summit there from June 7 to 9, again urged regulators and governments to change their mindset on aviation ownership and access rules.
'Markets are closed until governments negotiate them open, and foreign ownership restrictions have resulted in a hyper-fragmented industry of 3,200 players that is vulnerable to economic shocks,' he said. 'Airlines facilitated the global village. But because of outdated rules we are the last to be able to take advantage. This crisis must be an opportunity to modernise.'
Although Asean missed a December 2008 deadline to open markets between capital cities on a multilateral basis, Asean states should fulfil their obligations under the Asean Roadmap for the Integration of the Air Travel Sector, he said. 'Asean must aim high. A single market including ownership liberalisation by 2015 would be a major step forward.'
Mr Bisignani also welcomed the Malaysian government's decision to focus on building a strong KLIA hub and abandon plans for a second - low-cost - airport in favour of expanding KLIA.
'The priority must be on providing efficient infrastructure that delivers low costs for all airlines,' he said. 'Cross-subsidisation is not acceptable. Common facilities and services, such as landing charges and security, must be borne equally. And access to all facilities must be open to all airlines.'
In its latest airline financial health survey, Iata said worldwide airline losses in the fourth quarter of 2008 were bigger than expected at US$4 billion because of recession and fuel-hedging losses.
As a result, the organisation, which represents 230 airline members and more than 90 per cent of all scheduled traffic, has upgraded its full-year industry loss to US$8 billion for 2008, from an earlier estimate of US$5 billion.
It will present an update for 2008 and 2009 on Tuesday next week.
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Forecast of US$1.1b loss for Asian airlines too upbeat: Iata
Regulators urged to change mindset on aviation ownership and access rules
By VEN SREENIVASAN
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) The global aviation industry's numbers are bad, and the Asian numbers are a nightmare, International Air Transport Association (Iata) boss Giovanni Bisignani said yesterday.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>Bleak numbers: Airlines cut capacity by 4.3% in January but passenger traffic fell 8.4% and cargo was down an unprecedented 28.1% </TD></TR></TBODY></TABLE>'In December we projected a US$1.1 billion loss for Asia's carriers - the worst performance in the industry,' he told the Malaysian International Chamber of Commerce in Kuala Lumpur. But the shocking slowdown in Japan, the region's largest market, and China, the region's fastest-growing, makes this forecast look optimistic.'January passenger traffic in the region was down 8.4 per cent. Capacity cuts at 4.3 per cent were aggressive - but business is disappearing faster.
'Cargo was down an unprecedented 28.1 per cent. And as air cargo accounts for 35 per cent of the value of goods traded internationally, this is bad news for the region and the global economy. World trade is falling off a cliff.'
Asia-Pacific carriers are the biggest players in the global air freight market, accounting for 44 per cent of it.
Still, Mr Bisignani believes that despite the current recession, the Asia-Pacific will become the world's biggest single aviation market in a few years.
'Air transport is the lifeblood of the global economy,' he said. 'Iata's member airlines help support 32 million jobs and US$3.5 trillion in economic activity.'
Mr Bisignani, visiting KL ahead of the 65th Iata annual general meeting and World Air Transport Summit there from June 7 to 9, again urged regulators and governments to change their mindset on aviation ownership and access rules.
'Markets are closed until governments negotiate them open, and foreign ownership restrictions have resulted in a hyper-fragmented industry of 3,200 players that is vulnerable to economic shocks,' he said. 'Airlines facilitated the global village. But because of outdated rules we are the last to be able to take advantage. This crisis must be an opportunity to modernise.'
Although Asean missed a December 2008 deadline to open markets between capital cities on a multilateral basis, Asean states should fulfil their obligations under the Asean Roadmap for the Integration of the Air Travel Sector, he said. 'Asean must aim high. A single market including ownership liberalisation by 2015 would be a major step forward.'
Mr Bisignani also welcomed the Malaysian government's decision to focus on building a strong KLIA hub and abandon plans for a second - low-cost - airport in favour of expanding KLIA.
'The priority must be on providing efficient infrastructure that delivers low costs for all airlines,' he said. 'Cross-subsidisation is not acceptable. Common facilities and services, such as landing charges and security, must be borne equally. And access to all facilities must be open to all airlines.'
In its latest airline financial health survey, Iata said worldwide airline losses in the fourth quarter of 2008 were bigger than expected at US$4 billion because of recession and fuel-hedging losses.
As a result, the organisation, which represents 230 airline members and more than 90 per cent of all scheduled traffic, has upgraded its full-year industry loss to US$8 billion for 2008, from an earlier estimate of US$5 billion.
It will present an update for 2008 and 2009 on Tuesday next week.
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