Asia-Pacific to drive global aviation

Global airlines, which posted USD 2.8 billion loss last year, are expected to turnaround and achieve a profit of USD 2.5 billion this year, of which the Asia-Pacific carriers would account for USD 2.2 billion, the global airlines body IATA said.

The association asked governments across the world to allow a level-playing field to the aviation industry and allow airlines to "build efficiencies across borders" and the labour to see reason and not to go on strike.

Noting that the International Air Transport Association (IATA) expects airlines to post a global profit of USD 2.5 billion in 2010, its director general and chief executive Giovanni Bisignani said this is "a major improvement compared with IATA's previous forecast of a USD 2.8 billion loss released in March".

Addressing the IATA annual general meeting in Berlin, he laid out a vision for the industry in 2050, saying, "in just a couple of decades, the demographics of our customer base will change dramatically. The middle class will nearly triple from 1.3 to 3.5 billion people.

India and China will account for a quarter of these potential travellers. At about the same time, the GDP of BRICs (Brazil, Russia, India and China) will equal the G-7 nations, shifting cargo flows dramatically."

Attacking governments for regulations, the IATA chief said, "the governments must act more responsibly to ensure safety, security and a level playing field. And the airlines need the freedom to build efficiencies across borders, better serve their customers, and achieve sustainable profits to fund growth and innovation."

Lambasting the strikes and agitations by airline unions in different parts of the world, he said the labour is "out of touch with reality."

"We cannot pay salary increases with our massive losses. Pilots and crew must come down to earth and strikes at this time are short-sighted nonsense. Labour needs to stop picketing and cooperate," Bisignani said in a powerful message to the unions across the world.

Regarding passenger traffic, he said the Asia-Pacific carriers would continue to benefit from "the strong regional growth" and the Asian economies, excluding Japan, would grow by 7 per cent this year.

"China will outpace that with an expected 9.9 per cent GDP expansion. As a result, the region’s carriers are expected to deliver the largest profit at USD 2.2 billion", which is more than double the previously forecast USD 900 million in March and a major reversal from the USD 2.7 billion loss in 2009," Bisignani said.

Observing that airlines are benefiting from a strong traffic rebound, Bisignani said the USD 2.5 billion profit is "still a long way from sustainable profitability" as a major part of the global industry is still posting big losses. A stagnating economy, strikes, natural disasters, and a currency crisis have left European carriers struggling."

While the fuel costs will remain at the expected levels of USD 79 a barrel, the yields are now forecast to grow by 4.5 per cent for both the cargo and passenger business. "This is a significant improvement from the previously forecast yield growth of 2 per cent in passenger markets and 3.1 per cent for cargo," he said.

Asking industry leaders to look beyond the crisis over the last decade and strategically define a sustainable future, Bisignani outlined a vision for 2050. "We will be very near to zero accidents. We will emit half the carbon. We will have eliminated queues with integrated systems ensuring security as we process more passengers.

"We will operate with almost no delays in globally united skies. We will share costs and profits equitably across the value chain. We will be a consolidated industry of a dozen global brands supported by regional and niche players. And we will deliver value to investors," the IATA chief said.

Source: expressindia.com – 8th June 2010