Airlines adding capacity despite global economic slowdown
08 April 2008
Mumbai: Inspite of growing signs of a slowdown in global economic growth, airlines such as Singapore Airlines and India's Jet Airways are announcing significant capacity additions into the long-haul international markets. This, says a Centre for Asia Pacific (CAPA) report, conforms to a wider industry trend to keep growing international capacity.
Singapore Airlines (SIA) stated it is ''responding to changing patterns in demand for travel,'' by scrapping services between Bangkok and Osaka next month and Taipei-Los Angeles service in October this year. Overall, however, SIA is growing its capacity this summer, with 46 extra weekly frequencies being added to Brisbane, Sydney, Ho Chi Minh City, Hanoi, Shanghai, Chennai, Delhi and Dubai.
Jet Airways has announced plans to establish its second European hub, after Brussels, at Milan Airport, with onward services planned to the US. It is also launching an array of new international routes in the next two months, including a Mumbai-Shanghai-San Francisco service, and new routes to Hong Kong, Muscat and Abu Dhabi, as part of plans to ramp up its international presence.
Malaysian low-cost carrier AirAsia is targeting a 20 per cent increase in passenger traffic this year. Tony Fernandes, CEO AirAsia stated, ''Obviously, we're going to benefit from a recession - one of the first things people cut is travel and entertainment, so if you're flying on a full service airline, you're probably going to trade down.''
Full service carrier dominated Association of Asia Pacific Airlines (AAPA) hasn't given up the fight as yet and has reported a ''solid start'' to the year. It said international passenger traffic (RPKs) for its member airlines in the first two months of 2008 rose 5.1 per cent year-on-year, with average load factors rising to 77.5 per cent in the two-month period.
The Association of European Airlines (AEA) said passenger traffic (RPKs) on Asia Pacific routes in Jan/Feb 2008 rose 2.2 per cent year-on-year, but a 4.5 per cent increase in capacity led to a 1.8 ppt reduction in passenger load factor.