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Crowded Skies For Asia-Pacific Airlines  
User currently offlineECONOMICS From , joined Dec 1969, posts, RR:
Posted (8 years 4 months 2 weeks 3 days 12 hours ago) and read 2655 times:


from todays Australian Newspaper 15JAN ...

it seems like the buying/ordering frenzy by many airlines might not have been justified. It's like they all forgot that crash follows boom, as sure as night follows day.

Take note of last 2 paragraphs.

Steve Creedy, Aviation writer | January 15, 2008
AIRLINES operating in the Asia-Pacific face one of the most competitive environments for many years as strong growth collides with a potential global economic slowdown, a leading aviation think tank has predicted.

The Sydney-based Centre for Asia Pacific Aviation said yesterday that a surge in capacity being brought on by Asia-Pacific and Middle Eastern carriers would result in one of the busiest years of new airline activity in the region this decade.

It said the projected arrival of new aircraft in 2008 and the proliferation of new entrants would produce the most competitive airline conditions ever seen in the region.

"Several carriers are also preparing to establish offshore hubs through cross-border joint ventures, as well as through the utilisation of increasing rights available under more liberal air services agreements," the centre predicted in a wrap-up of regional airline activity.

"Extra hubs are also planned by some carriers.

"These changes, coupled with a possible global economic downturn, will result in some of the most competitive conditions in Asia for many years."

The centre listed five new joint venture airlines planning to launch this year, including the Australian joint venture between Indonesia's Lion Air and Brisbane-based SkyAirWorld to operate six Boeing 737-900ERs on international routes.

Others included Lion Air Thailand and Korea-based Incheon Tiger Airways, a partnership between Singapore's Tiger Airways and Incheon municipal authorities.

This was in addition to at least 10 start-ups slated to take off in 2008-09, including Virgin international offshoot V Australia and New Zealand-based Kiwijet.

The list of start-ups also included a low-cost subsidiary of All Nippon Airways, at least three new Korean carriers and new entrants in Bahrain and India.

On the long-haul front, Jetstar, Jet Airways, Air India, Air China and British-based Silverjet were all looking at overseas hubs.

Asian low-cost carriers planning significant international expansion included India's Deccan as well as Thailand's Nok Air and One-Two-Go, Malaysia's Air Asia and Singapore's Tiger.

Australasia featured prominently among markets expecting domestic growth.

The think tank noted that Jetstar expected to establish bases in Perth and Darwin while Air New Zealand was adding two Boeing 737s to expand its jet operations to regional areas.

Tiger Airways Australia was seeking a second base in Australia while Virgin Blue was launching regional services with new Embraer jets, re-entering the Canberra market and launching new destinations.

CAPA said this surge of new activity came as flag carriers across the region were anticipating new aircraft deliveries.

"The 2008 bottom line financially will rely very strongly on the direction taken by the economy - much of which will be driven from the US," it said.

"The next few weeks will provide a much cleared picture of this direction. Meanwhile, airline managements are growing increasingly nervous."

1 replies: All unread, jump to last
User currently offlineLightsaber From United States of America, joined Jan 2005, 15666 posts, RR: 100
Reply 1, posted (8 years 4 months 2 weeks 3 days 11 hours ago) and read 2596 times:

Do I think the shortage of Trans-Pacific seats will ease in 2008? Yes.

Is it a crisis? No. If you look at the markets the new entrants are going into, for the most part there is unmet demand. e.g., try getting tickets from the West Coast US to India... its a license to print money!

Yes, I realize there are seasons to air travel. Note: I'm an economic bear right now. (The 'gold rush' to real estate in the US has yet to unravel.) But even then I see opportunity for aviation expansion. India-US or China.

Some of the purchases have the do with the rapid retirement of older airframes due to $90+/bbl oil. 742's and other older airframes are ready for retirement. Expedited by high energy costs. So any surplus will rapidly disappear.


"They did not know it was impossible, so they did it!" - Mark Twain
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