28-Apr-2006 9:55 AM

Air traffic growth imperiled - Peter Harbison

Press Release

(Mumbai: 27 April 2006) Peter Harbison, Executive Chairman of the Centre for Asia Pacific Aviation (CAPA) today warned that passenger demand could slow quickly if fuel prices begin to impact consumer spending,

Opening the 2nd Annual Middle East and Indian Subcontinent Aviation & Tourism and Investor Summit in Mumbai, Harbison stated, "the growing oil price crisis sees the express train of demand growth coming into a lake of treacle as consumer demand slows, while fares rise. The express train is not yet stopped, but the slowing becomes unavoidable".

This 'treacle effect' is the biggest short-term threat to airline profitability worldwide, he said. Continued growth in India's aviation sector faces potential double-jeopardy The second obstacle to traffic growth is inadequate airport infrastructure, which is already showing signs of being unable to maintain pace with the growth in passenger demand.

"For Indian airports, there is no easy way to meet demand. The solution lies with Governments, at the Federal and State levels. They need to recognise that airport infrastructure is a CRISIS - not just a policy issues," stated Mr Harbison.

"Failure to take these aviation opportunities will destroy potential for extensive regional economic development across the Subcontinent," noted Mr Harbison.

The Centre's 2nd Annual Middle East and Indian Subcontinent Aviation and Tourism Investor Summit, held in Mumbai, features high-level participants, including the Hon Shri Praful Patel, Minister for Civil Aviation.