Asia-Pacific airlines report 27.4 percent jump in profits
Asia-Pacific airlines report 27.4 percent jump in profits
SINGAPORE (AFP): The Asia-Pacific's major airlines posted an
average 27.4 percent increase in profits in 1993-94 and prospects
for the current financial year look even brighter, industry
officials said yesterday.
Cheong Choong Kong, chairman of the Orient Airlines
Association (OAA), said profits of the association's 15 members
jumped to US$702.5 million against $563.5 million for the 1992-93
period.
"The profit is not much, but not bad, considering the net
losses of $4.1 billion in 1993 for the IATA (International Air
Transport Association) as a whole," Cheong said at the 38th
meeting of OAA presidents here.
The Geneva-based IATA groups 224 carriers, many of which, hurt
by recession, reported losses during the 1993-94 period.
Cheong said that operating profits of OAA airlines for 1993-
1994 rose to $1.51 billion, a 7.4 percent jump over the preceding
year.
The OAA members are Air New Zealand, Air Niugini, All Nippon
Airways, Cathay Pacific, China Airlines, EVA Air, Garuda
Indonesia, Japan Airlines, Korean Air, Malaysia Airlines,
Philippine Airlines, Qantas, Royal Brunei, Singapore Airlines and
Thai International.
The OAA, set up in 1966, is a non-profit body which acts as a
forum for discussing issues affecting the industry and promoting
cooperation among member airlines.
Cheong, who is also managing director of Singapore Airlines,
said results recently announced by Air New Zealand and Qantas
indicated that profits were rising, albeit from a low base for
some airlines.
Traffic
He said that the OAA airlines had reported growing traffic
this year, with passenger load reaching a high of 76 percent in
August.
But Cheong said that yields could not increase much because of
greater price consciousness among travelers, longer average
journeys, a proliferation of promotional fares and rising
competition.
"Hence, efforts to control costs, or at least those costs
under the control of airlines, remain vital," he said adding that
despite the difficulties productivity carriers rose 5.1 percent
in 1993-94.
"Many costs airlines face are beyond their control because
they are imposed by governments, airport authorities and other
regulatory bodies, quite often without consultation or
justification," Cheong said.
Hiroshi Yasuda, a senior official of the All Nippon Airways,
said Japanese airlines were expected to take at least four years
to fully recover from the effects of the current Japanese
recession.
"But while the recession is still there, we see some light at
the end of the proverbial tunnel. This is because we see traffic
to Southeast Asia rising in line with the increasing relocation
of manufacturing industries from Japan to the region," he said.
Singapore's minister of state for finance and defense, Teo
Chee Hean, who addressed the conference, called for a more
liberal aviation policy in the region and expanded exchange of
air traffic rights to support rapid economic growth.
"To spur economic growth and development in the region,
governments could encourage their national carriers to cooperate
with foreign airlines, spreading the costs and risks involved,"
Teo said.