Asia-Pacific Traffic Up Sharply In May; IT Spending On Rise

News

AWIN First Jun 23 , 2010
Neelam Mathews
New Delhi

Association of Asia Pacific Airlines’ preliminary figures for May point to continued growth in passenger and freight traffic, leading carriers in the region to boost IT investment.

Calling this a “surprisingly robust regional economic upturn,” an AAPA statement says Asia-Pacific-based airlines carried 14.6 million international passengers in May, up 17.6% from the same month last year.

“For the first five months of the year, Asia-Pacific carriers reported a welcome 10.7% increase in international passenger traffic as both leisure and business travel demand picked up. International freight traffic also bounced back sharply, up 35.6% compared to last year’s slump,” Andrew Herdman, AAPA director general, said.

International revenue passenger kilometers grew 14.6%. With a 3.3% expansion in capacity, the average international passenger load factor rose 7.3 percentage points to 74.6%.

Strong demand for international air cargo shipments propelled a 39% jump in freight ton kilometers. International cargo load factors climbed 8.7 points to 72.6% despite a 22.2% uptick in capacity.

“Asia-Pacific airlines are responding quickly to meet the welcome upturn in demand, whilst carefully managing capacity and costs,” says Herdman.

Meanwhile, a growing optimism that the worst may be over for an industry that sustained record losses the past two years emerged from the latest SITA/Airline Business magazine IT Trends Survey.

“The stabilizing budgets and increasing business confidence translate into a change in spending behavior for airlines away from short-term tactical remedies needed in 2009 and a return towards long-term strategic thinking,“ says Paul Coby, SITA chairman.

Globally, 56% of the 129 responding airlines expect to spend more on IT spend next year, while only 10% anticipate a decrease, the survey says.

The push for higher spending is being led by Asian carriers; 75% of the responding carriers in this region expressed confidence that IT spending will go up further next year.

After year-on-year declines, overall airline IT budgets in 2010 have stabilized or shown a slight increase. The operating outlay this year totals an average 1.8% of revenue, while capital spending remains flat at 1.4%.

A significant number of small carriers were among the 45% that reported higher IT budgets this year, compared to 2009. At the same time, about 50% of the airlines with budget decreases were European.

The survey confirms a strong ambition among airlines to implement virtualization technologies, with the initial emphasis on IT infrastructure: 40% of airlines have created a virtual infrastructure environment, a number that is expected to rise to 85% by 2013.

Software and desktop virtualization are the next steps in this transition.