Asia-Pacific to lead recovery of ailing aviation industry

Feb 1, 2010, 7:16 GMT

Singapore - The Asia-Pacific region is set to lead the recovery of the ailing aviation industry and shape the future of the sector worldwide, the head of a leading industry group said Monday.

'It is tough in all regions, but Asia-Pacific's prospects are improving faster than in other regions,' Giovanni Bisignani, director general of the International Air Transport Association (IATA), said in Singapore.

'The events in this region are defining the future of air travel,' he said.

After posting losses of 11 billion dollars last year, the global aviation industry would remain firmly in the red this year but cut its losses to about 5.6 billion dollars, he said.

The Asia-Pacific region would be leading the loss reduction, he added.

'We expect the region's 3.4-billion-US-dollar loss in 2009 to shrink to 700 million US dollars this year,' Bisignani told a conference ahead of Asia's largest aviation exhibition, the Singapore Airshow, set to kick off Tuesday.

In 2009, Asia-Pacific became the largest regional market for air travel with 647 million passengers flying within the region, representing more than one-fourth of the 2.2 billion air passengers worldwide, he said.

The number of travellers within the region last year overtook the 638 million passengers flying within North America, previously the world leader in traffic numbers, said Bisignani.

'By 2013, we expect Asia-Pacific's market share to grow to almost one third of the total market, with an additional 217 million people flying,' he said.

Bisignani also warned that challenges remain, as Asia's aviation industry has yet to tackle liberalization and regional open-sky agreements.

'Asian aviation will not reach its potential if the airlines are constrained to old ways of doing business,' he said.

The two biggest growth markets in the region, India and China, were experiencing difficulties, Bisignani said.

India's aviation industry was in a crisis as it tried to adjust its infrastructure and cost structure, he said, while Chinese carriers were struggling to adapt to new trade patterns.

Worldwide, IATA expected about 2.3 billion passengers in 2010, Bisignani said, adding that 'significantly improved yields are not in the forecast.'

Following the economic downturn and the outbreak of the H1N1 flu virus in 2009, airlines suffered the sharpest drop in demand since World War II, IATA said.