SYDNEY (Centre for Asia Pacific Aviation) - Major structural changes loom on the horizon for the airline industry in the region, according to the Centre for Asia Pacific Aviation’s Executive Chairman, Peter Harbison, at the 2nd Annual Asia Pacific and Middle East Aviation Outlook 2006 Summit in Kuala Lumpur.
Mr Harbison predicted that point-to-point services would progress to long-haul routes and there would be more merger activity and market exits in the next five years.
“We are about to see fundamental change. Sixty years of predictable regulatory control have not prepared the industry for what will happen next. Changes will be wrought by the advent of new, longer-range aircraft, new traffic and capacity in the Gulf region, and the steadily declining yields through intense competition”.
Mr Harbison also notes that, although the short-term will probably not see dramatic consolidation between airlines, the increasingly liberalised environment that is being created will result in both merger activity and market exits in the period to 2010.
Forecast growth will take place against a backdrop of heightened uncertainty. “Anyone planning long term today without recognising what is happening will get some nasty shocks in the next three years”, warned Mr Harbison.
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