PATA Warning: High Fuel Prices Endanger Global Economies, Tourism Industry

The Pacific Asia Travel Association (PATA) warns rising cost of fuel prices affecting airline operations worldwide would put global economies at risk. Airlines are an essential part of today’s society and also the lifeblood of global commerce and industry, according to PATA president and CEO Peter de Jong. Calling to mind the effects of the SARS outbreak five years ago when people stopped flying, de Jong noted that a drastic reduction in airline operations and the closure of important routes would surely put economies at risk.

PATA is currently engaged in talks with airlines and members of its organization to identify practical measures that can be adopted to help the industry surpass this latest threat. An immediate option that can be implemented by national governments at this crucial time is the review, reduction, or suspension of taxes and levies on the aviation sector. The aggressive pursuit of alternative fuel options is also needed. In line with this, PATA has also pledged its support for the International Air Transport Association’s (IATA) resolution calling for governments, airports, and labor unions to take immediate action to help the industry.

In the US, three major airlines, namely United Airlines, Continental Airlines, and Continental Airlines, have already announced plans to trim flight capacity and cut jobs due to rising fuel prices. The same scenario is happening in Asia Pacific with carriers in the region adopting a number of strategies in order to stay afloat. Eleven airlines flying out of Hong Kong, including Cathay Pacific Airways and Singapore Airlines, raised flight surcharges at the beginning of June. Down under, Qantas Airlines announced the likelihood of layoffs as well as the reduction of its domestic and international networks.

Despite these uncertain times, destinations can rely on strong passenger demand from Asia, which remains high despite rising fuel prices. Although concerns regarding demand for the second half of the year have already surfaced as several Asian carriers announced plans to scale down their international networks. For this reason, Scandinavia should step up its marketing efforts now given the growing interest in Europe and the increasing desire for new destinations by presenting itself as a unique, value for money destination providing nature, culture, history, and shopping all rolled into one package.

Source: News@Pata at www.pata.org