Airline recession will continue into 2010, good news for passengers

by Tom Johansmeyer on

The airline industry must be excited to see 2009 coming to a close. It was a year of route cuts, perk cuts and abuse from passengers over all kinds of sacrifices in the cabin … and a genuine commitment to fees for extra bags. The global financial crisis triggered in September 2008 hit the travel industry with extra severity, forcing airlines, famous for not being able to generate easy profits anyway, to scramble to keep their heads above water. But, at least there’s next year … not really.

While nobody with even shred of sense expected 2010 to be the year the airline industry went wheels up, the latest prediction from the International Air Transport Association is pretty grim. IATA expects the sector to lose $5.6 billion next year, thanks to higher fuel costs and revenue declines because of lower fares. This is worse than the $3.8 billion it originally forecasted. The number of passengers filling seats, IATA believes, will increase, but it won’t be enough to make a difference.

There’s good news in here. Continued brutal competition will keep fares low, so if you missed your chance to take that dream trip this year, you’ll have another bite at the apple in 2010. For the airlines … well, there isn’t any good news. But, is there ever?

[Photo by emrank | counting days | via Flickr]

Tough year ahead for Asia travel

by Tom Johansmeyer on

Hotels, airlines and other hospitality companies in Asia are moving into the “brace” position. With tough economic conditions hitting every corner of the map, fewer visitors are likely to make the long trip to destinations such as Hong Kong. According to a report on MSNBC.com, some expect drops of at least 30 percent. A continent of diverse cultures, it seems, is facing a consistent challenge.

Hong Kong, for example, had 29.5 million visitors last year. This year, the city is expecting a slip of 1.6 percent, with visits by non-Chinese tourists likely to drop 9.2 percent. Singapore is down 2 percent with nothing but pessimism in sight, and Thailand and Malaysia are readying themselves for 9 percent declines. Overall, hotel occupancy rates in Asian fell to 66.7 percent in November – from 76.4 percent for the same period a year earlier (STR Global).

According to the U.N.’s World Tourism Organization (UNWTO), the Asia-Pacific region’s financial performance (for tourism) is “deteriorated most rapidly” compared to the rest of the world. The International Air Transport Association (IATA) says that airlines around the world are staring down the worst crisis they’ve seen in 50 years. Many are at risk of collapse. IATA’s director-general puts the number of travel and tourism jobs at risk at 300,000 to 400,000 worldwide, out of a total job market of 32 million.

Even with all the doom and gloom, plenty of people will touch Asian ground this year, according to the Pacific Asia Travel Association (PATA). Even with a difficult 2009, the organization expects the regions arrivals to grow by 4 percent to 5 percent over the next three years, putting the region well ahead of its 2008 baseline of 280 million arrivals.

[Via MSNBC]