Security and tourism among top issues at Asian airlines summit
Security and tourism among top issues at Asian airlines summit
Reuters, Cebu, Philippines
Security and threats to tourism will top the agenda on
Thursday as executives from 17 Asian airlines start a two-day
annual meeting in the Philippines.
The hijack-suicide attacks on the United States over a year
ago are still fresh in the minds of the officials, but the summit
also comes a month after bombings in the Indonesian resort island
of Bali killed more than 180 people. Most of the dead were
foreign tourists.
The health of the world's largest economies and a leap in the
price of fuel in the event of a U.S.-led war on Iraq are other
key issues.
Asia, particularly China, is the fastest-growing market for
air travel, making passenger safety and confidence paramount in
the wake of the Oct. 12 bombings in Indonesia.
"The further north you go, the less carriers are affected,"
said Philip Wickham, an analyst at ING Financial Markets in Hong
Kong. "But if there was another attack, say in Phuket (in
Thailand), then the outlook would be different."
Philippine Airlines President Avelino Zapanta said Asian
carriers weathered the September 2001 attacks on the World Trade
Center and the Pentagon better than their U.S. counterparts,
largely due to the region's geography.
"Land transportation in both Europe and the United States is
very efficient," he told Reuters.
"Here in Asia, most countries are archipelagos, so they
(travelers) have to fly. Aside from that, the market these areas
serve is a real mix of fliers -- tourists, businessmen, overseas
workers."
But Zapanta, who is chairing the meeting of the Association of
Asia Pacific Airlines in the central Philippine city of Cebu,
warned that tourists from Europe and North America were the first
to disappear from the region if security was in doubt.
"The region is on the whole classified by Western countries as
unsafe now," said Anson Sng, an analyst at Phillip Securities
Research in Singapore.
"Indonesian routes are definitely affected but you can see
tangible diversion to countries such as Malaysia."
Despite security and tourism concerns, industry watchers said
the biggest threat came from the risk of recession in the United
States, Europe and Japan along with higher fuel costs that would
result from a U.S.-led attack against Iraq.
"Fuel is the biggest cost, but economic activity is still the
biggest driver of profits," said Peter Hilton, an airline analyst
at Credit Suisse First Boston. "We need to know what will happen
with the U.S. economy in 2003."
Fuel typically accounts for 15-25 percent of an airline's
costs.
China, with its booming economy, looks set to be the region's
bright spot.
U.S. plane maker Boeing Co. has forecast that China would need
more than 1,900 new jets worth US$165 billion over the next 20
years.
"The fastest growth is in China," said Hilton. "It will be a
very large market."