Page 6 - AAA NOVEMBER - DECEMBER 2016 Online Magazine

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Cautious Optimism
Asian carriers are reaping the benefits of low fuel prices, however turbulent times
could appear without warning
By Atul Chandra
Air India’s fuel efficient Boeing
787 Dreamliners have allowed it to
make more money on routes than
before. New jetliner types such as
the 787 and Airbus A350 are also
allowing Asian carriers to launch
new non-stop routes
6 ASIAN AIRLINES & AEROSPACE NOVEMBER / DECEMBER 2016
ASIAN CARRIERS HAVE BENEFITED threat,” said Alexandre de Juniac, IATA’s
from the dramatic fall in fuel prices that Director General and CEO. “And overall the
has allowed many of them to return to industry is still vulnerable to being buffeted
profitability. However, while airlines by rising geopolitical tensions, protectionist
have reaped the benefits of lower fuel political agendas, and weak economic
prices, excess capacity amidst cut-throat fundamentals. This will still be a good year
competition is proving problematic for for the airline industry’s performance, but
full-service carriers. The triple whammy of our profitability will continue to be hard-
excess capacity due to increased widebody won,” he added.
jetliner deliveries, weakening passenger Overall however, commercial aviation’s
demand because of an uncertain economic center of gravity continues to shift eastward;
climate and political uncertainty and greater domestic passenger traffic in India and China
leeway in discounting of fares on the back of is showing double-digit growth in annual
lower fuel prices is impacting the plans of traffic and Australian airlines displayed
many of the carriers in the region to improve record traffic numbers in September.
profitably. The past few months seem to Despite a slowdown in the Chinese economy,
have brought some succour to airlines its domestic air passenger traffic in 2015 saw
though. “September’s growth in passenger an increase of 36 million more passenger
demand was healthy. Importantly, this journeys as compared to 2014. The increase
rebound from August weakness suggests in Chinese domestic passenger traffic alone
that travel demand is showing its resilience was more than the domestic traffic of India
in the aftermath of terror attacks. We must, and Indonesia combined. Asian airlines are
of course, be ever-alert to the ongoing terror also making the most of the slump in jet fuel
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