The highly optimistic forecasts for traffic growth in the Asia-Pacific region by the world’s big OEMs haven’t encountered a lot of scrutiny, and few would argue with the notion that Asia ranks as the biggest market in the world over the next two decades. The prospects all look good for the OEMs, airport developers and service providers such as MRO outfits, but the airlines themselves have fallen behind much of the rest of the world in terms of profitability, raising questions about the sustainability of the region’s robust capacity growth.
According former Qantas fleet planner and Jetstar head of commercial Michael Newcombe, rising fuel prices and infrastructure deficiencies appear likely to slow the pace of growth Airbus, Boeing and others would like to see continue. Now the Singapore-based principal for global consultancy ICF, Newcombe expressed a “neutral” position on the prospects for the region, citing a disparity in the economic circumstances between, for example, North and Southeast Asia, and, in general, softening of yields due to upward pressures on costs and downward pressures on ticket prices.
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