Friday, September 24, 2010

How Asian Airlines Lead The Global Airline Recovery: An Insight

image Asia has definitely taken the lead in the road to recovery as far as the Aviation industry is concerned with Asian airlines leading the way to a stronger recovery than their global peers amid rising passenger and cargo volumes helped by the economic slowdowns in Europe and the United States. Global aviation industry's umbrella body IATA in its latest industry outlook has projected a global profit of $8.9 billion in 2010 for the Airline industry as a whole with airlines in the Asia-Pacific region leading the race with maximum profits to the tune of a $5.2 billion this year compared with $3.5 billion in North America, $one billion in Latin America, $400 million in the Middle East and $100 million in Africa.

In March, the Montreal-based organization, which represents 230 airlines and 93 per cent of passenger air traffic, predicted a 2010 loss of $2.8 billion U.S. for its members but in June, it revised that upwards to a modest profit of $2.5 billion U.S.

"Asia-Pacific carriers continue to benefit from strong regional growth," the IATA said, adding that the Asian economy, excluding Japan, is expected to grow by 7% this year, with China outpacing that with a forecasted 9.9% expansion.

One of the major factors contributing to the rise of the Asian airline industry is the fact that consumer spending in the North America and Europe has been falling in the recent past and is not expected to pick-up any time soon, joblessness was high and consumer confidence has also been on a regular decline.

The strong improvement in Asian airline profits has been based on strong market growth and yield gains. The 23.5 per cent improvement in high volume intra-Asia premium traffic, due to a surge in business travel, was another of the driving factors, the IATA said while renewed buoyancy in air freight markets was also important for airlines in this region, where cargo can represent up to 40 per cent of revenues.

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