Singapore Minister: Many Airlines Still Face Margin Pressure
SINGAPORE -(Dow Jones)- Singapore's second minister for finance and transport
Lim Hwee Hua on Friday said that many airlines were still suffering from sharp
declines in yields and profitability and the industry faces a second round of
threat from rising oil prices and worries of a second wave of the H1N1 strain of
influenza this winter season.
"We are still not out of the woods today, and I believe many of you here are
still watching for the indicative signs out there to firm up into a clear trend,
" Lim said in a speech addressing the Association of Asia Pacific Airlines'
Presidents conference.
She said that recent steps taken by the airline industry such as cutting
flights, reducing operational costs and heavy discounted-fare promotions had
given some success in paring down airline losses.
"But yields and profitability are still in sharp decline for many," Lim said.
The Association of Asia Pacific Airlines on Thursday said that Asian airlines
are expected to lose about US$4.8 billion this year due to the global economic
downturn. The organization also flagged continued uncertainties about the
sustainability of recent signs of "a fragile recovery" in passenger and cargo
volumes.
On the multilateral front, Lim said that the signing of the Association of
Southeast Asian Nations road map for integration of air travel sector provides
for liberalization of passenger air services amongst Asean capitals and that the
association is now working on further expanding the agreement to include all
Asean cities in stages.
"When this is endorsed by Asean transport ministers at the end of this year,
we will have hit the home stretch toward true Asean open skies," she said. "
Setting our sights beyond Asean, we will then be well-positioned to engage as a
bloc, to liberalize the air services regime with major economic powerhouses such
as China and India."
-By P.R. Venkat, Dow Jones Newswires; +65 6415 4152; venkat.pr@dowjones.com
(END) Dow Jones Newswires
11-19-092122ET
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