Asia airlines may hike fares on higher fuel costs<\/p>\n
KUALA LUMPUR (Reuters): Asian carriers may have to increase
\nair fares to cope with rising jet fuel costs despite improving
\npassenger and freight load factors, an industry official said on
\nTuesday.<\/p>\n
\"Ultimately, like any business, if your costs go up, then that
\nhas to be reflected in the prices charged to the customer,\"
\nRichard Stirland, director general of the Association of Asia
\nPacific Airlines (AAPA), said at a news conference.<\/p>\n
\"The demand for aviation fuel is actually growing faster than
\nthe demand for oil in general,\" he said.<\/p>\n
\"Because of market pressures, it's likely that even if the
\nprice of a barrel of oil stabilizes or even declines, it doesn't
\nnecessary follow that aviation fuel prices will also stabilize or
\ndecline.\"<\/p>\n
Stirland was speaking to reporters after announcing the 18-
\nmember industry group's relocation to Kuala Lumpur in search of
\nmore stable political and economic conditions after 30 years in
\nManila.<\/p>\n
He said domestic flights in particular faced possible fare
\nhikes as airlines had less flexibility to change domestic
\nschedules and concentrate on better-yielding routes.<\/p>\n
AAPA's 18 members include China Airlines, Cathay Pacific
\nAirways, Air New Zealand, Qantas Airways, Philippine Airlines,
\nSingapore Airlines, Thai Airways International, Japan Airlines,
\nKorean Air, Vietnam Airlines, EVA Airways and Malaysia Airlines.<\/p>\n
Stirland expected Asia air traffic growth, negative during the
\nregion's financial crisis, to maintain a double-digit recovery
\nrate year-on-year in the near term.<\/p>\n
\"We're thinking 11-12 percent growth in the short term, and
\nperhaps tailing off to something just below double digits in 18
\nmonths' time,\" Stirland said of monthly passenger traffic growth.<\/p>\n
He added that cargo traffic was expected to grow by 12-15
\npercent year-on-year over the long term in line with increasing
\ntrade both within Asia and with the rest of the world.<\/p>\n
Stirland also expected yields, measured by revenue per
\npassenger, to pick up as load factors rose.<\/p>\n
\"There is no sign that the airlines are going to order lots
\nmore aircraft...so airlines will be able to improve their
\nyields,\" he said.<\/p>\n
Air safety<\/p>\n
Stirland acknowledged a widely-held perception that Asian
\nairlines were more prone to accidents than their Western
\ncounterparts, but said members were taking steps to erase that
\nimage to cling on to customers.<\/p>\n
\"Statistically, you can prove that over the past five years,
\nthere has been a greater incidence of significant accidents in
\nAsia than equivalent airlines in Europe,\" he said. \"That is
\nundeniable.\"<\/p>\n
A 20-year-old Alliance Air Boeing 737-200 aircraft crashed
\ninto a housing estate and burst into flames in eastern India on
\nMonday, killing 55 people and triggering a debate over the use of
\naging aircraft.<\/p>\n
Stirland said constant training and checking of cockpit crews
\nin the region was needed, in addition to breaking cozy ties
\nbetween national airlines and regulatory authorities to ensure
\nproper checks.<\/p>\n
Airlines in China had recently recruited safety officials from
\nthe United States in an effort to improve their safety records,
\nhe said.<\/p>\n
On the group's membership, Stirland said he expected to
\nwelcome mainland Chinese airlines into AAPA within the next 18
\nmonths despite difficulties caused by the current inclusion of
\nTaiwan's China Airlines and EVA Air.<\/p>\n
Beijing considers Taiwan a breakaway province and has
\nthreatened to invade if the island declares independence or drags
\nits feet indefinitely on reunification.<\/p>",
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