DNA
Mumbai, Aug 7: Global airline capacity will be trimmed by around 7% —or 59.7 million seats — by the last quarter of 2008, compared with the same period last year, predicts a report by Official Airline Guide (OAG), a UK-based international aviation data firm.
The decline will be consequent to a 7% drop in the number of flights for October, November and December.
And as airlines cut unprofitable flights to fight high oil prices, several allied industries are also expected to be affected.
While the decline is at its severest in the US — which will account for almost one third of the slowdown — Asia will not be spared.
The continent will see a 13% decrease in capacity, which according to OAG, is equivalent to a 3-year setback in growth.
It may be recalled that most of the boom in aviation over the past decade had come from Asia. India too has witnessed capacity reduction over the past few months, as the price of aviation turbine fuel (ATF) skyrocketed.Steve Casley, chief operating officer of OAG, said in a statement, “The projected 13% drop in Asian seat capacity is a significant metric that may have wider impact. From OAG’s statistics, it looks quite possible that we may be facing a far more severe global downturn than we have experienced before.”
The report expects the crisis to have a domino effect: “Many airports will be severely affected by the announced cuts by airline operations, with 275 airports around the world losing scheduled air service altogether based on current filed schedules. Of these, 32 are in the US while 116 are in the Asia-Pacific region.”
Furthermore, OAG has also cut its 10-year forecast for the global scheduled aircraft fleet by over 3,500 aircraft. New aircraft deliveries are expected to fall by 744 planes, while near-term firm orders are expected to be pushed back rather than be cancelled.
Maintenance, repair and overhaul (MRO) spending is also expected to drop by 15%.
Not everybody seems to be worried. According to a recent report in news magazine Newsweek, interest in rail has exploded as a result of the rising prices of oil. The woes of airlines might herald a revival of railways world wide.