Airlines ramping up capacity despite signs of global economic slowdown

Mumbai: Singapore Airlines and India’s Jet Airways are the latest carriers to announce significant capacity injections into long-haul international markets, as part of a wider industry trend to grow international capacity this year, according to a Centre for Asia Pacific (CAPA) news report. But the moves come amid growing signs of a slowdown in global economic growth. The International Monetary Fund (IMF) recently cut its 2008 outlook for global economic growth for the second time this year, from 4.1 per cent to 3.7 per cent; well down from 4.8 per cent predicted by the IMF in October 2007.
Singapore Airlines (SIA) stated it is “responding to changing patterns in demand for travel,” by scrapping services between Bangkok and Osaka next month and Taipei-Los Angeles service in October this year. Travel to/from Japan and the US appears to be softening, but notably, the route cuts are offshore, and services to these markets from SIA’s Singapore hub are being maintained. Overall, SIA is growing its capacity this summer, with 46 extra weekly frequencies being added to Brisbane, Sydney, Ho Chi Minh City, Hanoi, Shanghai, Chennai, Delhi and Dubai.
Jet Airways meanwhile has announced plans to establish its second European hub (after Brussels) at Milan Airport, with onward services planned to the US – to take advantage of Alitalia’s pull-back from the Northern Italian city.
07/04/08 TravelBizMonitor

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Categories: Indian Aviation- In General Apr 2008