Asia Pacific airlines remain optimistic

The Jakarta Post, Nusa Dua, Bali

Despite the war in Iraq and the spread of SARS, air carriers in the Asia have been doing better compared to their peers in North America and Europe on the back of better economic performances in the region, an executive said on Monday.

Peter J. Morris, an official at the International Air Transportation Association (IATA), said the economic situation in North American and European countries had been weak compared to countries in Asia.

This situation has reduced people's ability and willingness to save for traveling.

"So, even during the outbreak (of Severe Acute Respiratory Syndrome or SARS), airline carriers in Asia seem to be doing better," Morris told reporters at a media briefing on the sidelines of the Pacific Asia Travel Association (PATA) currently being held in Bali.

"The Asia-Pacific region is the bright spot in the industry," he added.

Besides better economic performance, intra-regional travel is another factor that has saved the airline industry in the region from collapsing.

"Intra-regional travel will be more robust in term of leisure travel. You will see, for example, Japanese traveling more to Thailand or Indonesia," Morris said.

PATA's president Peter de Jong had mentioned earlier that 65 percent of the travelers from Asia-Pacific countries were from the region which saved the travel industry during a slump in the industry due to the Sept. 11, 2001 and Oct. 12, 2002 terror attacks.

Morris predicted that the airline industry in the region would still book a profit this year.

He did not provide details on his prediction but said that the Asia-Pacific airline industry gained some US$3 billion to $4 billion last year, before the war and SARS outbreak.

In contrast, the airline industry in North America suffered a loss of between $9 billion to $10 billion last year, Morris said.

The decision by the U.S. government to go to war in Iraq, Morris said, added further to the slump in the airline industry in North America and Europe.

"The traffic level has been down since the war began. It affects the industry in terms of the willingness of American people to travel and others to travel to North America," he said.

With the current situation, Morris said the airline industry in North America could lose between $6 billion and $8 billion overall this year due to reduced demand in both international and domestic routes. While Europe is predicted to do a little bit better.

"North America is the worst hit with air carriers losing routes both internationally and domestically. While Europe should just about break even with some air carriers doing well and others not," Morris predicted.

IATA predicted that this year, the number of international air passengers would grow by only around 2 percent from last year's figure of 1.6 billion people. Before the war and SARS, the association had expected the number to grow around 7 percent.