SYDNEY, Jan 4, 2007 (AFP) – Asian airlines will likely reap reduced profits in 2007 as increased competition offsets gains in passenger and freight traffic, a global aviation body said Thursday.
The International Air Transport Association (IATA) predicted that the sector would see total profits for Asia plummet from around 1.7 billion US dollars in 2006 to some 1.2 billion dollars this year.
“The lower profits are due to the increased competition in the region as a result of liberalisation, aircraft deliveries and new entrants,” the IATA said in a statement.
The warning accompanied data showing Asia, which in recent years has seen the emergence of many discount carriers, can expect strong gains in international passenger traffic while leading the global freight growth stakes.
Significant new capacity and routes will boost international passenger growth to an annual average rate of 5.7 percent between 2006 and 2010, beating a global average of 4.8 percent, IATA said.
Pakistan was expected to see the greatest advance at 8.2 percent, with China boasting 8.1 percent and India 7.9 percent while Australia would lag behind at 4.5 percent, the airline organisation said.