Asia-Pacific carriers may be the first to recover from the dramatic industry downturn due to the lower household debt in Asia compared with the US andEurope, according to the International Air Transport AssociationÃ¢â‚¬™s chief economist.
Asia-Pacific airlines may see recovery as early as 2010 Ã¢â‚¬“ ahead of the rest of the industry Ã¢â‚¬“ due to the lower household debt in the region compared to significantly higher household debt levels in the US and Europe.
International Air Transport Association (Iata ) chief economist, Brian Pearce, said the recovery could also be led by the increase in domestic spending in the region rather than an improvement in exports as consumer sentiment in North America was still weak.
Ã¢â‚¬Å“Asia-Pacific looks in a better shape to see recovery and stronger growth. It may probably see recovery by 2010 at the earliest. Even in Europe, the recovery forecast is expected to further decline next year,Ã¢â‚¬Â he said at the 65th Iata annual general meeting in Kuala Lumpur.
On the general recovery of the industry, Pearce said the situation still looked fragile Ã¢â‚¬“ a situation he expected to remain for the next 12-18 months.
Ã¢â‚¬Å“The industry is at the horizontal part of Ã¢â‚¬ËœLÃ¢â‚¬™ shape and hopefully it would be able to turn around and make a Ã¢â‚¬ËœUÃ¢â‚¬™ shape by 2010,Ã¢â‚¬Â he said.
He said manufacturers must also increase inventory sales before seeing a recovery in air freight. Ã¢â‚¬Å“There was anenormous over-hang of inventories due to recession at end-2008. Air freighteventually stopped deteriorating butwe need to see increase in end-sales,Ã¢â‚¬Âhe said.