Special Report: Training in the Asia-Pacific
All roads lead to Asia
July 1st 2012
It was more bad news for the 700-plus delegates at the International Air Transport Association’s (IATA) annual general meeting and world transport summit in Beijing last month as the same old problems continue to stack up against the aviation industry: fuel prices, the environment, rock bottom economies, sky high taxes and charges. Read More »
But for one man the AGM was a triumph. IATA director general, Tony Tyler, was elected last year amid rumblings of discontent. Some members accused the association of lacking transparency.
At the time, Tyler said: “I hear your message”, and promised to deliver. One year on and the plaudits were paid, even by the critics. He had duly delivered.
It’s a pity his first state of the industry address could not have delivered a more positive tone for the industry. The fact is profits are plummeting, expected to fall to $3 billion in 2012, compared with a record of $15.8 billion only two years ago. Even more worrying is a net profit margin of 0.5%.
If any region can take any positives from these figures it must be the Asia-Pacific which is forecast to account for two thirds of the global profits. Driven by the powerhouse, China, it was perhaps not insignificant that this year’s AGM was held in Beijing where the executives of the Mainland’s carriers turned out in force.
It’s perhaps also not insignificant that the IATA director general is a former chief executive of one of Asia’s premier carriers, Cathay Pacific Airways. The power is moving East, the Asia-Pacific is the fastest growing aviation market in the world and in coming years it will put more distance between itself and its competitors.
No where in the world have carriers ordered more planes, no region in the world is building more new airports. Low-cost carriers are booming.
It’s true that economic growth has slowed somewhat from a heady 10% plus in China this year. The region as a whole has seen profits fall. But it still stands tall and strong compared with Europe and the U.S.
It may be no time soon, but the tide of change will come and the industry will flourish again, albeit it may be too late for some carriers, reported IATA’s chief economist, Brian Pearce.
When it does, the Asia-Pacific airlines, past masters of bouncing back from recessions, will take up where they left off. And Tyler will have reason to smile.
