Asia Pacific Aviation Outlook 2004 'A year of massive opportunity for aviation and tourism'

2004, the Year of the Monkey, will be a year of massive opportunity for Asia’s airlines, airports and the tourism industry, according to the Centre for Asia Pacific Aviation.

Launching the Centre’s Asia Pacific Aviation Outlook 2004 Report today, the Managing Director Mr Peter Harbison said that “it could and should be the best year ever”. He added that, in the aviation and tourism industries, there will be more valuable investment opportunities in this region than in the rest of the world.

“We start the year with traffic levels close to a year ago – a strong position, given the drastic impact of SARS on the region in 2003. If the current momentum is maintained, double digit traffic growth should therefore be a near-formality,” Mr Harbison told a briefing for journalists, previewing the Report.

“The signs ahead are positive. Liberalisation of air services is accelerating rapidly and consumer sentiment is positive in most countries. Underlying economic conditions across the region are currently favourable in a way which has rarely occurred, with all countries synchronised in favourable growth patterns. 

“In these circumstances, provided airlines manage capacity effectively, this growth should flow straight to the bottom line. It should also be good news for aircraft manufacturers, as profitability and demand coincide.”

Similarly, airports and the tourism industry should experience solid results. In this climate, the investment prospects for an array of airport privatisations across the region are correspondingly strong. For tourism, there will be overall strong to very strong growth, but with increasingly differentiated product requirements creating challenges for all and opportunities for many.

Mr Harbison said the profile of the airline sector will continue to change along the lines being drawn in 2003. “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,” he said. 

“The domino effect of new airline entry and of liberalisation, promoted by China and probably by India, could in fact sweep change across the region remarkably quickly. For incumbent airlines, the agility that is characteristic of the monkey, will be needed. There can be no room for complacency in a market with such change in store.”

Inevitably there are threats to such optimistic projections, but even here there is some cause for encouragement, providing the travel and tourism sector applies the lessons it has learnt in the past few years.

Mr Harbison said SARS seems likely again to have an impact, but it will be handled very differently this time. “Attacks against aviation or other economic activities must now be factored into any risk assessment, but the visible process of adjustment to this new environment is encouraging.”

Economically, a cloud on the horizon is also the role of US dollar and the direction of that major economy. With an election later this year, the US may be a wild card.

“But, for the time being, it is hard to see the Asian aviation juggernaut being stopped,” he said.