Air Transport World

OAA outlook 'promising' through 2000. (Orient Airlines Association)

OAA outlook 'promising' through 2000 Seoul--An upbeat mood was prevalent at the Orient Airlines Association's Assembly of Presidents, despite uncertainties connected with the Persian Gulf crisis and rising labor costs. OAA Chairman C. K. Cho, president of Korean Air, said that the long-term outlook remains promising, with the Asia/Oacific region expected to dominate the world-travel market by the year 2000, contributing about 50% of the total international passenger traffic and some 58% of world cargo traffic. During the period, average annual growth is estimated at 10.5% for passengers and 13.4% for cargo. Cho noted that the Gulf crisis has had a double impact on the world industry--high costs of operation and reduced demand for air travel. Operating costs have increased 8-12% for OAA airlines due to higher fuel and insurance costs. Fuel and oil costs jumped from 14% of total operating costs to 24%.

Provided the effects of the Gulf Crisis are not "prolonged and devastating," Cho is optimistic about the future for OAA airlines in the Asia/Pacific and southwest Pacific regions, noting that association members plan to introduce an additional 348 aircraft in the next five years, representing an investment of some $40 billion. As of August, members' fleets comprised 677 aircraft, more than 70% of them widebodies.

Cho urged OAA airlines to assume a collective leadership role to ensure maximum opportunities in the growing Asia/Pacific market, pointing out that "there is already evidence of increased participation in the market by operators based outside the region. …

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