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The Impact of Fuel Surcharges on Revenue Will Diminish In 2007, As Competitive Pressures Intensify and Asia Pacific Earnings Will Be Depressed In 2007 and 2008, Due To Cost Pressures -- ''Aviation Outlook 2007''

Posted on: Monday, 2 April 2007, 12:00 CDT

Research and Markets (http://www.researchandmarkets.com/reports/c53112) has announced the addition of Aviation Outlook 2007: "Dawn of a New Era" to their offering

Packed with analysis, commentary and data, the Outlook report is your essential aviation research companion for the region.

The report covers the Big Issues facing Asia Pacific aviation in 2007, including LCCs, liberalisation, restructuring, aircraft orders/deliveries, skills, funding, security, the environment and the economy.

The overall themes of 'Outlook 2007: Dawn of a New Era' include an impending "full frontal attack" on flag carriers commencing in 2007, and the continued unfolding of the influential LCC story in Asia.

Among the key findings:

-- New entry: As liberalisation sweeps through, new airlines are inevitably starting to emerge (which is the main underlying phenomenon, not just an LCC movement). That they are appearing on long-haul routes speaks only of a new diversity, rather than simply of long-haul LCCs. By definition, these new entrants will have a low cost base and will be free from many of the legacy features; if not, they have no chance of survival;

-- Liberalisation: Intra-Asian liberalisation appears likely to accelerate in 2007. The prospect of a momentous opening up of the Singapore-Kuala Lumpur route -- provoked, significantly, by tourism interests -- would have repercussions right around the region, as ASEAN States prepare to open their skies between capital cities in 2008. Until now considered more of a concept than a serious reality, ASEAN 2008 would take on genuine meaning;

-- Restructuring: As the new entrants begin serving long-haul arteries, the future of incumbent flag carriers will now be confronted more directly, prompting further urgent restructuring. The long-haul market has been their unique preserve and underpins the advantage they have at their home hubs;

-- Revenue: The impact of fuel surcharges on revenue will diminish in 2007, as competitive pressures intensify. Yields will resume their long-term downward trend from late 2007;

-- Earnings: Asia Pacific earnings will be depressed in 2007 and 2008, due to cost pressures, increasing liberalisation, rising capacity growth and rising competition from new entrants. Long-haul profitability will be weakened by rising competition from Middle East carriers and an intensified focus on Asia by European and North American airlines;

-- Constraints: Apart from regulation, in 2007 there are other real constraints on expansion and new entry: aircraft availability, skilled human resources, airport and airways infrastructure and funding. For existing players, these can be helpful in the short term, as they will limit the extent to which the competition can grow;

-- Security: Security costs and risks will continue to plague the industry in 2007; the new limits to on-board liquid allowances has just begun to hit home and will have a highly unwelcome negative impact on airport revenues -- pain which must be passed on to airlines and to travellers;

-- Environment: The environment movement, which has quickly become a major political movement in Europe, will arrive in this region with considerable force this year;

-- Economy: Meanwhile, the continuing strength of the global economy, in the face of extreme oil price increases, has surprised many. The short-term signs are of a benign outlook, but the strong cycle is unlikely to continue forever. And paradoxically, if economies slow, so fuel prices will fall. As long as the good cycle continues, and China powers ahead, with India now becoming a force to reckon with, the Asia Pacific aviation business will maintain its surge.

Your questions answered in Outlook 2007:

-- Will the long-haul low cost model work?

-- How will regionally branded airlines take-over the landscape?

-- Will the flag carriers fight back?

-- Will consolidation occur in Asia?

-- What is the traffic/earnings outlook?

-- Which airports have the best prospects in 2007?

This 180 page report, published in March 2007, reviews the airline, airport and tourism prospects for 2007 by a team of leading analysts. The report provides an overview of the industry's prospects, as well as coverage of 17 countries in four geographic regions of the Asia Pacific region.

Content Outline:

PART A Executive Summary Introduction - Outlook 2007: Dawn of a New Era

The Drivers for 2007 International Traffic International Capacity International Market Share Liberalisation The Economy LCCs Fleets Human Resources

The Outlook for 2007 Earnings Funding

Airports & Tourism Airports Tourism

PART B North Asia China Hong Kong SAR Macau SAR Japan South Korea Taiwan

Southeast Asia Indonesia Malaysia Philippines Singapore Thailand Vietnam

Indian Subcontinent India Pakistan Sri Lanka

South Pacific Australia New Zealand

Reviews:

"The Outlook 2007: Dawn of a New Era provides an in-depth analysis of the air transport trends shaping events in the Asia Pacific region in a highly readable format. The Outlook describes the current contest between a new breed of low cost carrier (LCC) and flag carriers, with each move and counter move carrying high stakes in the battle for both market share and profits. Outlook provides a balanced view of the action, examining the sustainability of strategies of the airline adversaries and the probability of the success of new initiatives, including the recent introduction of long-haul LCCs. It is important reading for industry stakeholders and government decision makers alike."

-- Robert J. Aaronson, Director General, Airports Council International

"The Outlook 2007 report is a valuable resource, combining comprehensive data on Asia Pacific aviation with some thought provoking analysis on the major trends shaping the industry's future growth."

-- Andrew Herdman, Director General, Association of Asia Pacific Airlines

For more information visit http://www.researchandmarkets.com/reports/c53112

Source: Business Wire

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