Airlines may not survive crisis

SOME airlines will not survive the worsening global economic situation, an industry association said on Wednesday, warning that the next 12-18 months will be 'extremely difficult' for Asia-Pacific carriers.

Passenger numbers are falling as Americans and Europeans curtail travel plans and the current financial market turmoil undermines consumer confidence, the Association of Asia Pacific Airlines (AAPA) said in a statement monitored on its website.

'The biggest challenges right now are weakening passenger demand, particularly for first and business class travel, and continuing uncertainty about the global economic outlook,' AAPA director-general Andrew Herdman said.

'Asian carriers are therefore bracing themselves for a period of continued turbulence, hopefully without losing sight of their long term strategic goals and future growth opportunities.

'The next 12-18 months will be extremely difficult times for airlines and some won't survive the current crisis.'

He added that the association 'remains extremely cautious about prospects for the airline industry in 2009'.

While fuel prices have recently declined, they are still 25 per cent higher than last year, Mr Herdman said.

The crisis, which began in the US subprime, or higher-risk, mortgage sector, has been routing global financial markets and there are signs the impact is affecting other economic sectors such as manufacturing, tourism and property.

AAPA is a trade association of international airlines based in the region, including Air New Zealand, All Nippon Airways, Asiana Airlines, Cathay Pacific Airways, Singapore Airlines and Malaysia Airlines.

The other members are China Airlines, Dragonair, EVA Air, Garuda Indonesia, Japan Airlines, Korean Air, Philippine Airlines, Qantas Airways, Royal Brunei Airlines, Thai Airways and Vietnam Airlines. -- AFP

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