BUSINESS

Global air traffic will rebound — Report

FARNBOROUGH (LONDON), JULY 26. The 2002 commercial aviation global Current Market Outlook (CMO) report released at the ongoing Farnborough International has projected an average passenger traffic growth of 4.9 this year, cargo traffic of 6.4 per cent and worldwide economic annual growth of 2.9 per cent.

The report, widely regarded as the most comprehensive analysis of the commercial aviation market and brought out by one of the giant aircraft manufacturers, the Boeing Company, has predicted that the airline traffic levels will return to pre September 11 levels by the end of 2002, but has cautioned that the total airline revenues will take longer duration to recover as yields are under pressure.

Releasing the report at a news conference and later in an interview to The Hindu at the air show, Randy Baseler, Vice-President (Marketing), Boeing Commercial Airplanes, said the confidence level of passengers wanting to travel more in certain markets have already emerged especially in the Asian region which has shown positive signs of rebounding besides encouraging trends seen on the travel to and from the U.S. and the Europe. Pointing out that the shift from a regulated to liberalised market has increased competition among airlines and forcing them to operate at much higher levels of efficiency to remain profitable, Mr. Baseler noted that air travellers preference for more frequent, non-stop flights with shorter trip timings, would continue to drive the market evolution and airline strategies. "After all, air travel is all about passenger convenience and saving time,'' he added.

The U.S.-based Boeing Company estimated that the world fleet would double to almost 33,000 jets by 2021, comprising a little more than 17,200 new airplanes for market growth; 6,700 airplanes for replacement; and more than 8,500 airplanes that now are flying. The mix of current and new planes was expected to accommodate a forecast of 4.9 per cent growth in the global air travel, plus 6.4 per cent growth in the cargo segment. However, Mr. Baseler said the regional growth would vary between 3.5 per cent and 7.9 per cent, with Latin America expected to be the fastest growing market.

Projecting that global airlines would invest $1.8 trillion in new commercial airplanes, equating to about 24,000 airplane deliveries over the next 20 years, the well-documented report anticipates the freighter market would need 2,500 cargo airplanes to be inducted to the cargo fleet over the next 20 years, of which more than 70 per cent would be modified passenger and "combi'' airplanes.

"We see market fragmentation or "point-to-point'' operations continuing worldwide, which means airlines will rely more and more on smaller airplanes to take care of safety and offer reliable service,'' Mr. Baseler said adding that in the next two decades airlines would be spending most in heavy maintenance, airport routes and infrastructure, airplane servicing and airframe component repair segments. Referring to the Asia Pacific region market, Mr. Baseler noted that there were emerging signs of positive growth already recorded in April this year and the present trends were encouraging. "In today's travel environment, airlines want partners and suppliers who understand the market, appreciate the challenges faced by the individual operators besides have the expertise to pull together industry resources to solve airline problems,'' he added.

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