SUSTAINED growth in passenger markets, lower fuel prices and operating efficiencies last year have aided Asia-Pacific airlines to return to profitability in 2015, the Association of Asia Pacific Airlines (AAPA) revealed.

According to AAPA’s preliminary figures, Asia-Pacific airlines recorded US$6.9 billion in combined net earnings last year, marking a major upswing from net losses of US$1.2 billion in 2014.

This was despite operating revenues falling 5.6 per cent from US$176.8 billion in 2014 to US$166.9 billion. Passenger revenue decreased 5.4 per cent to US$128.4 billion, due to a decline in yields despite the growth in traffic demand.

The revenue contraction was offset by a 12.6 per cent fall in combined operating expenses to US$153.0 billion, driven by a 31.4 per cent decline in fuel expenditure to US$41.2 billion.

Within the year, global jet fuel prices dropped significantly by 43.5 per cent to an average of US$64 per barrel. As a result, the share of fuel expenditure as a percentage of total operating costs declined 7.4 percentage points to 27 per cent.

“Asia-Pacific carriers saw a welcome return to profitability in 2015, after suffering aggregate losses in the previous year. The region’s carriers registered a significant operating margin of 8.3 per cent, compared with the one per cent margin achieved in 2014,” Andrew Herdman, AAPA director general, commented.

Looking ahead, he said: “Asian carriers are encouraged by the sustained growth in passenger demand, but continue to face a challenging operating environment characterised by intense competition, cost pressures and volatile currency markets.”

An aerial view of the current Ibrahim Nasir International Airport in the Maldives

A NEW passenger terminal will be built at the Ibrahim Nasir International Airport by the Saudi Bin Ladin Group (SBG). Scheduled for completion in 2018, the new terminal will increase the airport’s handling capacity to more than seven million passengers, up from the current three million.

The contract for the new terminal was inked between managing director of Maldives Airports Company Adhil Moosa and SBG representative Abdul Aziz Bin Laden last Sunday. Singapore’s Surbana International has been appointed as the consultant to the project.

Moosa unveiled during the signing ceremony that the 78,000m² terminal will have 40 departure gates, 38 immigration counters, 12 shaded jetties, six aero bridges (which can be converted to four bridges), a state- of-the-art baggage screening and an explosives detection system.

Last month, president Abdulla Yameen unveiled an ambitious plan to develop the country’s main international airport, including a 65m-wide runway, with US$800 million worth of foreign loans.

London Tower Bridge against the city skyline

TOURIST arrivals in London hit a record 31.5 million in 2015, an increase of 20 per cent over the last five years.

International visitors reached 18.6 million in 2015, up seven per cent from 17.4 million in 2014. Meanwhile, domestic tourism (from within Great Britain) accounted for 12.9 million visitors last year.

The unprecedented visitor volumes have translated into a 35 per cent increase in tourism spending compared to 2010, amounting to 15 billion pounds (US$21.7 billion) in receipts on hotels, restaurants, shopping and attractions.

Tourism players such as Bernard Donoghue, director of the Association of Leading Visitor Attractions, attributed the robust tourism performance to “the diversity and excellence of our tourism experiences…from Harry Potter to Beatrix Potter, Shakespeare to shopping”.

As well, major events including Cosmonauts: The Birth of Space Age, at the Science Museum, Alexander McQueen: Savage Beauty at the V&A, The Elephant Man at the Theatre Royal Haymarket and the 2015 Rugby World Cup helped draw visitors to the city.

This year is looking to be another momentous year as the UK celebrates 400 years of Shakespeare’s legacy, events to mark the Queen’s 90th birthday and Tate Modern opening a major new extension, which is being hailed as the most important new cultural building in the UK since the British Library in 1998.

London could welcome 35.6 million visitors to the city by 2020, according to predictions by independent forecaster Oxford Economics.

Mayor Khan voiced his support for the tourism industry

“London has something for everyone and an appeal that clearly extends across the globe,” said Sadiq Khan, the newly-elected mayor of the city. “I’ve pledged to do all I can to support our vital tourism industry so London continues to be a top choice for travellers.”

The tourism industry contributes over 36 billion pounds to the capital every year and supports around 700,000 jobs.

A beach in the Khao Lak area

THE southern Thai resort market of Khao Lak is expected to welcome one million arrivals this year, a dramatic transformation for a destination that saw less 300,000 hotel guests in the year after the 2004 Asian Tsunami, according to a report from C9 Hotelworks.

In the decade since, numbers have risen steadily and tourist footfalls numbered at 962,020 in 2015. Key drivers are rising Chinese and Australian visitors, adding to the European guests that still dominate the market with 80 per cent of arrivals. Other emerging markets include Japan, South Korea, Malaysia and Singapore.

While Khao Lak’s supply of 104 registered accommodation units with 7,822 keys pales in comparison with neighbouring Phuket’s nearly 50,000 rooms inventory, its strong compounded annual growth rate of 16 per cent over the past five years have attracted hotel developers with 1,213 new rooms coming into the supply pipeline.

C9 Hotelworks’ managing director, Bill Barnett, said that Khao Lak has become a year-round market, with strong arrivals in the traditionally lean summer months. He also added that the destination has been able to “attract an increasing number of visitors from nearby Phuket who have destination fatigue”.

He added: “Though the destination is firmly connected to the bigger Greater Phuket infrastructure including the expanded airport, in the long-term Phang Nga will have to develop its own gateway airport in order to control its own tourism destiny.”

The closure will allow the island’s marine and island ecosystems to recover

THE Thai authorities have recently announced the closure of the Koh Tachai, part of the Similan National Park in Phang Nha province, to limit environmental damage brought about by tourism.

The reserve will be closed indefinitely even beyond mid-October, when national marine parks in Thailand typically reopen after the mandatory monsoon season closure. Yung Island, in the Phi Phi archipelago, is another island that will be closed until further notice.

Travel companies interviewed are unfazed by the announcement however, saying Koh Tachai is a peripheral tourist destination.

“Currently our company does not have much business to the island,” Pankaj Sawhney, country head – Thailand & Indo-China region for Red Apple Travel told TTG Asia e-Daily.

Likewise, Laurent Kuenzle, founder and CEO of Asian Trails, does not foresee Koh Tachai’s closure to impact operations. “There are many other islands that can be visited instead of Koh Tachai for divers, snorkellers and regular day-trip tourists,” he added.

Meanwhile, the Tourism Council of Thailand’s president Ittirit Kinglek is urging the government to tackle the problem of environmental degradation in the Andaman Sea by installing more mooring buoys to protect corals in the area.

UK’s largest budget hotel chain Premier Inn has rolled out its expansion strategy in South-east Asia by launching its first Indonesian hotel in Surabaya, with further growth planned for the country as well as more openings in Thailand and Singapore.

The 129-room Premier Inn is located a five-minute drive from Juanda International Airport, close to the city centre and attractions such as the Surabaya Night Carnival Theme Park.

President and managing director at Premier Inn International, Ratnesh Verma, said: “We’re confident that our new hotel will set a definitive benchmark in our hospitality sector for Surabaya, and become the preferred choice for value conscious travellers.”

Premier Inn is targeting 50 hotels by 2020 outside its UK home base, where it currently operates over 700 hotels and more than 60,000 rooms.

Tourists on Rodeo Drive, Beverly Hills, upscale shopping and dining district in California, US

ASIA-PACIFIC’s luxury travel market will see faster overall growth than Europe’s from 2011-2025, according to a new Amadeus report featuring data from Tourism Economics.

North America and Western Europe accounts for 64 per cent of global outbound luxury trips, but the Compound Annual Growth Rate (CAGR) in luxury outbound trips for Asia-Pacific from 2011-2025, projected at 6.3 per cent will be higher than Europe’s (5.3 per cent).

Leading the region are India and China, with a CAGR of 12.8 per cent and 12.2 per cent respectively. India’s projected growth in luxury travel is the highest of the 25 countries explored in the report and presents great potential for luxury travel investment over the coming decade.

The report further finds that growth in luxury travel will outpace overall travel, spurred on by consumers’ desire for life experiences. Over the next 10 years, the growth rate in outbound luxury trips is projected at 6.2 per cent, almost a third greater than overall travel (4.8 per cent).

“The Asian luxury travel market is one to watch. It presents a lucrative opportunity for travel players but will not be an easy one to crack. Asian luxury travellers have a unique set of motivations and needs – truly understanding what drives their travel behaviour will be critical for travel providers looking to tap into that segment,” said Hazem Hussein, executive vice president, airline commercial, Amadeus Asia Pacific.