The Asia-Pacific aviation sector is poised to bounce back from the SARS crisis and post bumper profits this year after enduring the most difficult 12 months in its history, the Center for Asia Pacific Aviation said yesterday.
Managing director Peter Harbi-son said liberalization would snowball, with China and possibly India leading the charge, there would be greater investment opportunities, consumer confidence had recovered, economic conditions were favorable and low cost airlines would shake up the status quo.
"It could and should be the best year ever," the head of the Australian-based group told reporters. "For the time being, it is hard to see the Asian aviation juggernaut being stopped."
Harbison said the industry had made a remarkable recovery from the outbreak of SARS last year, which ravaged bottom lines as airlines slashed services when passengers stayed away in droves.
"We went to the depths with SARS but we came back in a way that nobody expected," Harbison said.
"Even the most optimistic didn't expect that we would come back so fast," he said.
The outlook for this year is welcome news for Asia's airlines which suffered equally from the post-Sept. 11, 2001, slump compounded by the Bali bombing a year later and the SARS crisis.
Harbison said fresh data showed consumer confidence in most countries was high and a fourth-quarter recovery last year has set a solid platform to work from this year.
Liberalization is shaping up as the year's focus.
"China has just completed an open skies agreement with Thailand, which is going to have major ramifications in terms of domino effect and in terms of the direct impact," Harbison said.
"India is threatening dramatic changes to its regulatory structure. So between those two we are talking about 2.5 billion people," he said.
He said China will be involved in at least 20 liberalization agreements this year with countries including the US, Britain and Germany, as well as Hong Kong.
Harbison predicted liberalization in Malaysia and Singapore would likely follow.
But he warned bigger airlines against complacency as up to 11 low-cost carriers flood the regional market and noted the poor success rate of budget airlines spawned from mainstream parents in the US and Europe.
"The low cost airline phenomenon, overlaid on a more liberalised marketplace, will have a major influence -- both as an agent of change and as a growth element in itself," Harbison said.
In terms of profits, he is forecasting double-digit growth for airlines which will provide a significant boost across the system.
Floats of up six regional airlines, including Air China and Garuda Indonesia, and three airport administrators will boost investment opportunites.
The year is not without its risks and the "the biggest cloud on the horizon is the US economy," Harbison said.
"It is the unknown. It is the one thing that could derail what is happening," he said.
Rising fuel prices, a second SARS outbreak, security issues and airlines' moves to limit capacity could also contain profits while governments in the US, Australia, Thailand and Malaysia, among others, could be distracted by elections.
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