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Airlines in Asia and the Middle East Buck Trends

Research and Markets has announced the addition of Asia Pacific & Middle East Aviation & Tourism Outlook 2005 to their offering The aviation sector in the Asia Pacific and Middle East region will continue to defy global industry trends in 2005, maintaining high growth and profitability after a record 2004. In this annual report on the regional outlook for aviation and tourism, a more subdued, but still robust performance for airlines and airports is predicted in the year ahead. The report estimates that airlines in Asia and the Middle East achieved a record USD3 billion profit in 2004 - USD750 million from Chinese airlines - on traffic growth of more than 20%. That compares with aggregate losses of USD6-8 billion in the US, and USD500 million in Europe.
“For Asia Pacific airlines, 2004 was an oasis in a desert of global bad news,” according to the Outlook 2005 report.
“While operators in Europe and North America licked their wounds, the region’s carriers moved rapidly from recovery to robust growth and profitability.” the report went on.
“That growth should consolidate in 2005, barring further upsets, and establish the Asia Pacific as a key target for major investment in service expansion and new operations.”
This report notes that “this snowballing development and intensifying competition should deliver substantial benefits to airports, regional economies and tourism and consumers”. “However, for the airlines, the prospect of high growth is overshadowed by likely manpower shortages and a further depletion of yields, raising the potential for a profitless (or less profitable) volume scenario for some.”
It is believed that the outstanding profit levels of 2004 are unlikely to be repeated in 2005, although results should be positive again this year. “As liberalisation sweeps through the region, traffic growth should be impressive, with double figure increases again commonplace,” it says. “The entry of new airlines in regional markets and expansion of access rights on long haul routes will stimulate the growth, but at the same time dilute profitability.”