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.