Airlines were the biggest newsmakers of 2014, along with the terrorists of the ISIS and the diplomatic initiatives of Pope Francis which resulted in the normalization of relations between the United States and Cuba after more than 50 years of Cold War.
Malaysian Airlines lost two jumbo jets, one by terrorist attack and another through a mysterious disappearance over the Indian Ocean.
The Boeing 777-MH370-200ER disappeared on March 8, 2014 in the South China Sea. It had 239 onboard, including a crew of 12. The Boeing 777-200ER MH17 was flying from Amsterdam to KL on July 12, 2014 when it was shot down by pro-Russian terrorists in Ukraine. It had 297 on board, including a crew of 14.
Another Malaysian-owned airline, AirAsia lost its A320-0200 jumbo jet Sunday with 162 people on board on Dec. 28, 2014. Operated by AirAsia’s Indonesian affiliate, the plane was flying in bad weather and was requesting to change course when it crashed.
Malaysia-owned carriers thus suffered from three plane crashes in a single year with some 698 people involved.
2014 probably ranks as one of the worst in aviation during the 21st century. There were plane 17 to 20 crashes and/or incidents last year, the worst of them being the three Malaysian carriers’.
So is safe to fly? Yes. It is much riskier taking a taxi or a jeepney ride to our decrepit Manila international airport than dying in a plane crash. The odds of dying in an air accident is one in 3.5 million.
But tell that to a plane passenger experiencing a turbulence in flight. He or she will bring out his Rosary and start reciting the Hail Marys.
There is something unique about Catholics. Muslims are not afraid to die because they are see they will see Allah in afterlife. Catholics are afraid to die. Why? Because there is no guarantee they will meet the Lord in the afterlife. Catholic scare tactics have been such that the faithful have been conditioned to always be prayerful because they will miss going to Heaven in case they die suddenly while in the state of sin.
In any case, 2014 proves that plane crashes can happen anytime for a number of reasons. Among these are: Unsafe airports (Manila and Jakarta were once downgraded for inadequate safety procedures and facilities for aviation), incompetent pilots (usually they are the first to be blamed after a crash; they are not around to defend themselves, anyway); incompetent airport controllers and managers (have you been to Terminal 1 and Terminal 3 of NAIA? They are living proofs that incompetent people do exist in this world); complicated airplanes ) they have so much wiring and so many computers the planes manage to fly – and crash – themselves; and terrorists and hijackers (they account for a third of airline crashes and incidents).
Despite the crashes and the incidents, airlines are enjoying a booming business in Asia. One billion passengers flew in 2014 – a record and 33 percent of the global total.
According to the International Air Transport Association (IATA), airlines in the Asia-Pacific region will make a net profit of $5.0 billion in 2015 (up from $3.5 billion in 2014) for a 2.2 percent net profit margin. That translates into $4.30 per passenger.
Airlines are expected to post a collective global net profit in 2014 of $19.9 billion (up from the $18.0 billion projected in June). This will rise to $25.0 billion in 2015.
For 2015, the growth drivers in commercial aviation, according to IATA, are lower oil prices and a global economic boom.
Oil prices have fallen substantially in recent months. This is expected to continue into 2015, predicts IATA.
The full-year average price is expected to be $85/barrel (Brent), the first time that the average oil price has fallen below $100/barrel since 2010 (when oil averaged $79.4/barrel).
Jet fuel prices are expected to average at $99.9/barrel in 2015 for a total fuel spend of $192 billion which represents 26 percent of total industry costs.
Lower fuel cost is not immediately felt by the airlines. They buy fuel forward. Therefore, the airlines are losing, more than making money now, with cheaper fuel.
Meanwhile, IATA says global GDP is expected to grow by 3.2 percent in 2015, up from 2.6 percent in 2014.
IATA says this will be the first time that global GDP has broken over 3.0 percent since 2010 (when global GDP grew by 4.1 percent in a post-recession bounce back), this time boosted by the fall in oil prices.Ӭ
Passenger traffic is expected to grow by 7.0 percent in 2015, above the 5.5 percent growth of the past two decades. There will be more planes in service, though.
Capacity growth is expected to outstrip growth in passenger traffic slightly at 7.3 percent, pushing the passenger load factor to 79.6 percent (slightly down on the 79.9% expected for 2014).
The fall in the price of fuel is expected to lead to cheaper airfares for consumers, says IATA, but not immediately.
After adjusting for inflation, average return air fares (excluding surcharges and taxes) are expected to fall by 5.1 percent to $458 in 2015. Total passenger numbers are expected to grow to 3.5 billion and passenger revenues are expected to grow to $623 billion.
IATA says consumers will benefit substantially from the stronger industry performance as lower industry costs and efficiencies are passed through.
After adjusting for inflation, average return airfares (excluding taxes and surcharges) are expected to fall by some 5.1 percent from their 2014 levels and cargo rates are expected to fall by a slightly bigger 5.8 percent.
Globally, airlines will make $25 billion net post-tax profit, a 3.2 percent margin. On a per passenger basis, airlines will make a net profit of $7.08 in 2015. That is up on the $6.02 earned in 2014 and more than double the $3.38 earnings per passenger achieved in 2013.
biznewsasia@yahoo.com