Trade tensions affect Asian flight business outlook for 2020: AAPA

By Reuters - Global Times Source:Reuters-Global Times Published: 2019/11/28 20:18:40

A passenger plane of Air China stops at berth at Beijing Daxing International Airport in Beijing, capital of China, May 13, 2019. Beijing Daxing International Airport completed its first test flight of passenger planes as four aircraft landed safely on the runway Monday morning. (Xinhua/Cai Yang)

Asian airlines are cautious about the outlook for 2020 after trade disputes have undermined confidence and led to economic growth below initial forecasts this year, the head of the Association of Asia Pacific Airlines (AAPA) said on Monday.

Airline passenger growth in Asia has moderated this year to around 4.4 percent in the nine months ended September 30, down from 7.7 percent for the same period in 2018, AAPA statistics show.

Asian cargo carriage fell 5.8 percent in the first nine months of the year amid the China-US trade war.

"I think we need to be a little bit cautious," AAPA Director General Andrew Herdman told Reuters of the 2020 outlook after having met Asian airline chief executives in Kuala Lumpur, capital of Malaysia.

"If it turns out to be a bit better than expected, then we will be ready to respond."

AAPA moved the meeting to Kuala Lumpur after cancelling plans for a larger gathering in Hong Kong, citing the "unpredictability" of the situation following months of often violent protests in the Chinese city.

Several Asian airlines have cut flights to Hong Kong over the coming weeks as demand has fallen, which, along with the grounding of the Boeing 737 MAX, has made growth more challenging.

Herdman said he believes the capacity adjustments to Hong Kong will be reversed once the situation improves and tourists return to the city.

"The general feeling is Hong Kong will recover in due course," Herdman said. "In the short term, [airlines] need to adjust to demand as they find it."

AAPA on Monday announced Herdman, a former Cathay Pacific Airways Ltd executive, planned to depart in March after 15 years in his role. He will be replaced by Subhas Menon, a long-time executive at member carrier Singapore Airlines Ltd.


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