Aviation industry crawling upwards

THE aviation industry is slowly recovering from the worst-ever downturn it faced last year. This has been the observation of the International Air Transport Association (IATA).

According to IATA, there was a significant improvement in all measures of airline business confidence in the January 2010 survey. For the first time since January 2008, a majority of airlines reported improving profitability in the previous quarter. IATA says 75 per cent of airlines worldwide expect profitability to improve in 2010, but with substantial regional variation – reflecting relative economic growth – with positive Asian airlines but more pessimism among European airlines.

During 2010, airlines can expect narrowing of losses, not necessarily reporting profits, IATA says. It's own forecast predicts that airline net losses will halve from US$ 11 billion in 2009 to US$ 5.6 billion in 2010.

In 2009 intra-Asia-Pacific travel had eclipsed the number of travelers in North America as the world's largest aviation market. Asia-Pacific's travelers numbered 647 million compared the 638 million who travelled within North America (including domestic markets). By 2013 an additional 217 million travelers are expected to take to the skies within Asia–Pacific.

“Achieving Asia-Pacific's tremendous potential is contingent upon short-term efforts to battle the impacts of the economic downturn with cost reductions and efficiency gains. Longer-term Asia-Pacific must also face global challenges including environment, security and liberalization,” said Giovanni Bisignani, IATA's Director General and Chief Executive Officer.

The loss reduction is being led by Asia-Pacific's carriers who are expected to see their losses shrink from US$ 3.4 billion in 2009 to US$ 700 million in 2010. “Asia-Pacific's prospects are improving faster than other regions,” said Bisignani.

The Indian economy will grow at 7.2 per cent in 2009-10, said the Central Statistical Organisation (CSO) on February 8, 2010 in its advance estimate, compared to the Finance Ministry's and Reserve Bank of India's projections of 7.75 per cent and 7.5 per cent, respectively. In 2008-09, the economy grew at 6.7 per cent.

To achieve 7.2 per cent growth in 2009-10, the economy is expected to grow at 7.4 per cent in the second half as against a growth rate of 7 per cent in the first half. This suggests that economic activity is picking up.

The Finance Ministry is hoping that its projection of 7.75 per cent will come true. Finance Secretary Ashok Chawla said the current estimate of CSO is likely to be revised upward when the figures for third and fourth quarters are released. He said this had happened earlier too.

With the forecast in growth of Indian economy between 0.5 per cent and one per cent, air travel in the country is also expected to rise, but perhaps not in the same proportion. This is already evident by the fact that most airlines in India have carried more number of passengers in the winter season 2009-2010.

In this upbeat aviation scenario in India, the Ministry of Civil Aviation in cooperation with the Federation of Indian Chambers of Commerce & Industry (FICCI) is holding the second edition of India Aviation 2010, March 3-7 at Begumpet Airport, Hyderabad. The first edition of the dedicated civil air show, held in 2008 was a grand success. More than 160 exhibitors from 17 countries participated at the show, USA being the Partner Country.

India Aviation 2010 is expected to be bigger in area and participation, with France as the Partner Country.