Grey Skies Are Gonna Clear Up
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Grey Skies Are Gonna Clear Up
DJ Asia-Pacific Air Traffic To Be At 2002 Levels By Late Sep
26/08/03 08:09:59 PM
SYDNEY (Dow Jones)--Passenger numbers for most Asia-Pacific airlines should be restored to 2002 levels, if not higher, by late September as pent up demand caused by the SARS crisis hits the market, according to a report from the Centre for Asia Pacific Aviation.
The recovery in traffic figures since SARS was brought under control has been unexpectedly rapid, contributing to a "very positive" outlook for regional aviation, travel and tourism, the consultancy group said Tuesday.
In most cases, and notably in China and Hong Kong where SARS had the biggest impact, "the speed of the return to normal has been almost breathtaking," it said.
SARS, or severe acute respiratory syndrome, was first recorded in November, but was most virulent between March and July, throwing the aviation industry into a tailspin.
The center, which expects most of the region's airlines to be profitable in calendar 2003, attributed the rebound in traffic to the underlying strength and resilience in the travel and tourism market, the level of competition and a so-called snap-back factor, following a prolonged period of uncertainty leading up to the Iraq war.
However, "as traffic growth explodes and yields climb slowly back up" there are several threatening factors, including terrorism, the prospect of industrial action as airlines attempt to restructure, a substantial rise in fuel costs should Middle East tensions increase, and excessive capacity as carriers chase market share, the report said.
Other factors to be considered include the possible resurgence of SARS and a possible lull in November as passengers bring forward travel plans to take advantage of fare bargains.
The consultancy group, which has just formed an alliance with insolvency and restructuring specialist Ferrier Hodgson, also highlighted the inevitability of substantial staff reductions and other cost-cutting measures to cope with uncertain yields and competition from budget operators.
"As Asia-Pacific's aviation and tourism industries look towards 2004, the recent optimism has an underlay of urgency to reinvent, in order to survive in a frenetic environment," it said.
"It may be that the best strategy for some established airlines on point-to-point routes, painful though it may be, is to accept the cannibalization risk and to gnaw off their own arm to stay alive," it said.
The center's report coincides with talks between Australia's Qantas Airways Ltd. (A.QAN) and unions about the airline's plans to tackle its workforce costs. Qantas intends to increase casual and labor hire numbers to 8% over two to three years from 4%, currently. The balance of the part-time workforce will continue to be permanent part-time employees, with this category set to climb to 17% from 11% of the total Qantas workforce over two to three years.
A union spokesman said the talks with Qantas were "exploratory and informative."
"We are going to go back and talk among ourselves," and will likely meet with Qantas again for further discussions, he said.
-By Helen Ubels, Dow Jones Newswires;
Fingers crossed!
Cheers
CC
26/08/03 08:09:59 PM
SYDNEY (Dow Jones)--Passenger numbers for most Asia-Pacific airlines should be restored to 2002 levels, if not higher, by late September as pent up demand caused by the SARS crisis hits the market, according to a report from the Centre for Asia Pacific Aviation.
The recovery in traffic figures since SARS was brought under control has been unexpectedly rapid, contributing to a "very positive" outlook for regional aviation, travel and tourism, the consultancy group said Tuesday.
In most cases, and notably in China and Hong Kong where SARS had the biggest impact, "the speed of the return to normal has been almost breathtaking," it said.
SARS, or severe acute respiratory syndrome, was first recorded in November, but was most virulent between March and July, throwing the aviation industry into a tailspin.
The center, which expects most of the region's airlines to be profitable in calendar 2003, attributed the rebound in traffic to the underlying strength and resilience in the travel and tourism market, the level of competition and a so-called snap-back factor, following a prolonged period of uncertainty leading up to the Iraq war.
However, "as traffic growth explodes and yields climb slowly back up" there are several threatening factors, including terrorism, the prospect of industrial action as airlines attempt to restructure, a substantial rise in fuel costs should Middle East tensions increase, and excessive capacity as carriers chase market share, the report said.
Other factors to be considered include the possible resurgence of SARS and a possible lull in November as passengers bring forward travel plans to take advantage of fare bargains.
The consultancy group, which has just formed an alliance with insolvency and restructuring specialist Ferrier Hodgson, also highlighted the inevitability of substantial staff reductions and other cost-cutting measures to cope with uncertain yields and competition from budget operators.
"As Asia-Pacific's aviation and tourism industries look towards 2004, the recent optimism has an underlay of urgency to reinvent, in order to survive in a frenetic environment," it said.
"It may be that the best strategy for some established airlines on point-to-point routes, painful though it may be, is to accept the cannibalization risk and to gnaw off their own arm to stay alive," it said.
The center's report coincides with talks between Australia's Qantas Airways Ltd. (A.QAN) and unions about the airline's plans to tackle its workforce costs. Qantas intends to increase casual and labor hire numbers to 8% over two to three years from 4%, currently. The balance of the part-time workforce will continue to be permanent part-time employees, with this category set to climb to 17% from 11% of the total Qantas workforce over two to three years.
A union spokesman said the talks with Qantas were "exploratory and informative."
"We are going to go back and talk among ourselves," and will likely meet with Qantas again for further discussions, he said.
-By Helen Ubels, Dow Jones Newswires;
Fingers crossed!
Cheers
CC
