Asian airlines to see mid- to long-term growth

GENEVA: Asian airlines are likely to see positive growth in the medium to long-term amid growth of the emerging middle class, development in big cities and increasing trade flows.

International Air Transport Association (IATA) chief economist Brian Pearce said the growing economy in Asia is a good opportunity for the development of airlines in the region.

"The outlook over the next 10 years is good for the industry and cargo but we need to overcome the difficulties in trade.

"We are also seeing lower capacity in passenger market due to weak business travellers on long haul market, which are associated with world trade. Many airlines are facing declining yields in the region, but it could be a temporary problem," he told Bernama at the IATA Global Media Day 2013, here today.

Pearce said the airlines are facing temporary difficulties due to weak trade which affected premium travel growth and air cargo demand.

According to IATA, the growth of air travel and air cargo was closely linked to the expansion of international trade than the gross domestic product (GDP).

It said production was being on-shored partly because of rising trade barriers since the recession, which could potentially be resisted or reversed, and also partly due to a market-driven slowdown.

Pearce said trade and air cargo business were affected with countries raising non-tariff trade barriers as they try to keep production at home to protect own jobs.

"IATA hopes the Bali trade deal will help to turn this situation around. Asia is the manufacturing centre of the world and trade is important for economic development, so we need to see trade facilitation measures to get it moving again," he said.

Furthermore, Pearce said the Asean free trade, which is likely in 2015, should give a positive boost to airlines in Asia as more trades would be generated as countries lowered their trade barriers. -- BERNAMA