APAC region overtakes US in air travel growth

During 2009, intra-APAC travellers numbered 647 million compared to the 638 million who travelled within North America, including domestic markets

The growth in air travel in the Asia-Pacific (APAC) region has eclipsed that in the largest aviation market of the US, with the airline industry in the eastern part of the world preparing to show a comeback by drastically reducing its losses, reports PTI.

In its report, the International Air Transport Association (IATA) said that in 2009, intra-APAC travellers numbered 647 million compared to 638 million who travelled within North America, including domestic markets.

"By 2013, an additional 217 million travellers are expected to take to the skies within APAC," the IATA has estimated.

It said that the global aviation industry was expected to reduce losses from $11 billion in 2009 to $5.6 billion in 2010. The loss reduction is being led by APAC’s carriers who are expected to see their losses shrink from $3.4 billion in 2009 to $700 million in 2010.

"APAC’s prospects are improving faster than other regions," IATA's director general and chief executive Giovanni Bisignani said at the Singapore Air Show.

The region's two biggest growth markets—India and China—faced "completely different circumstances", he said.

"India's challenge is to reduce costs and improve infrastructure, while China is adjusting to new global trade patterns," Mr Bisignani said, but warned that in the longer term, APAC would also face global challenges including environment, security and liberalisation.

Noting that APAC was a diverse and dynamic region with great potential, Mr Bisignani said the region's governments provided over $10 billion in bailouts to airlines in the first quarter of the year.

Speaking on the potential of the region's aviation sector, he said that there were three aircraft seats per year for each of the 300 million people in the US.

But China's population of 1.3 billion was served by only 0.3 seats per person and India's 1.1 billion population has only 0.1 seats available per person.

"The global air transport industry will triple in size when Asians travel as much as those in the US," he said, adding that the region was also home to two of the world’s top five airlines in terms of profitability.

The IATA chief said that over the past decade, China replaced Japan as APAC's largest player, having a fleet of 1,400 aircraft compared to Japan's 540.

He, however, said that Asian aviation would not reach its potential "if the airlines are constrained to old ways of doing business". The ASEAN aviation industry was preparing for regional liberalisation of market access by 2015.

"It is important that the target date is met. This is already well behind the industry-leading developments in the US-EU Open Skies agreement. Second stage talks will conclude this year with ownership being the most important issue," Mr Bisignani said.

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