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Airlines bank on India, China growth

Jun 06 2011 16:20 James-Brent Styan

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Singapore - China and India will become the driving force of aviation in the future, said the International Air Transport Association (Iata) on Monday.

The global industry body said the Asia-Pacific region is already the single largest market for aviation in the world. “By 2014 it will represent 30% of the total market and it is still growing fast,” said Giovanni Bisignani, the outgoing CEO.

Bisignani said the region already represents 40% of the global cargo market.

“The region will produce 360 million more travellers by 2014, of which 210 million will be from China alone. China is hungry for aviation to drive prosperity. They have built 45 new airports in the past five years alone and are planning a further 52 by 2020.”

He added that three of the five largest airlines by market value are from the region.

“The region will also be the most profitable region this year. We expect Asia-Pacific carriers to earn $2.1bn in 2011, the most profitable of all regions. This region will also be the only region where demand increases (6.4%) will outstrip capacity growth (5.9%) in 2011.”

Iata also said on Monday that it expected the global aviation industry to make a combined profit of $4bn in 2011. African carriers are expected to make a loss of about $100m.

Iata is holding its annual meeting in Singapore this week with more than 700 industry leaders attending.

Increase in traffic

The body estimates that air traffic will increase to 16 billion people by 2050 and air cargo will increase to 400 million tonnes per year. In 2011 the expected number of airline passengers is 2.7 billion, while 48 million tonnes of cargo will be transported by air.

Bisignani said airlines were faced with a tremendous challenge to meet this growth in demand, due to profit margins not making the business sustainable.

“After a decade of crisis and shocks, airlines today are safer, stronger, leaner and greener. But sustainable profitability remains elusive," he said.

Estimated profits this year is about $4bn, while total revenue of is seen at $598bn. "Over the past four decades the net return of the industry has been 0.1%. This has led to an increasingly fragile industry,” he said.

 
iata  |  airlines
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