SriLankan bears brunt of impact to tourist trade from floods, but elsewhere industry escapes long-term damage
The devastating tsunamis of 26 December are forcing some Asian carriers to redirect capacity, but the impact on most, including the region's fast-growing group of low-cost carriers (LCC), is expected to be minimal.
SriLankan Airlines is probably the most affected carrier because it relies heavily on tourist traffic to hard-hit Sri Lanka and the Maldives. The tsunamis wiped out the east and north coastline of Sri Lanka, setting back the island's tourism industry which was booming following a 2002 ceasefire between the government and Tamil rebels.
SriLankan has since steadily grown its fleet from six Airbus aircraft following a rebel attack on Colombo airport in 2001 to 14 Airbus aircraft today. But further expansion is now in jeopardy.
"Naturally, tourist arrivals to Sri Lanka and the Maldives will be severely curtailed during the months to come," says SriLankan chief executive Peter Hill.
The tsunamis were a double whammy for SriLankan because it is also the de facto flag carrier for the Maldives, which is expecting a drop in visitors, although most of its resorts are intact. The islands were badly flooded by the tsunamis, including the only international airport, which was shut for one day and closed at night for three days because of damage to navigation equipment.
A number of South-East Asian carriers, including several start-ups, have been affected, but damage to popular tourist destinations such as the Thai island of Phuket is not expected to threaten any airline's survival or to even lead to aircraft delivery deferrals.
Phuket is a major market for five LCCs, but experts say they should be able to redirect their capacity given that their fleets are still relatively small.
"These carriers are not wholly dependent on Phuket," says Peter Harbison, managing director of the Centre for Asia-Pacific Aviation. "It's not very hard to reallocate one or two aircraft."
The seven Thai carriers that serve Phuket, including three LCCs and three leisure operators, all serve several unaffected tourist destinations and none are based on the island.
"Travel agents are offering alternatives to Phuket, so a lot arerebooking, not cancelling," says Bangkok Airways vice-president marketing Peter Wiesner. "We've had quite a demand for Samuias tourists who were heading to Phuket have decided to go to Samui instead."
There are also few direct services to Phuket from outside South-East Asia. Most flights from north Asia and Europe, including all of those operated by Thai Airways, stop in Bangkok and airlines say these flights remain full. "If they [the tourists] don't go to Phuket they go to Bangkok," says Orient Thai and LCC One-Two-Go chief executive Udom Tantiprasongchai.
Restrictive bilaterals, however, could limit some flexibility to redirect capacity. For example, there are no available rights from Singapore, where three new LCCs are based, to the popular Indonesian resort island of Bali or anywhere in Cambodia, India or Vietnam. In addition, the current Malaysia-Singapore bilateral prohibits any new entrants.
But the tsunamis could lead to an acceleration of previously slow-moving bilateral talks between Singapore and India, Indonesia, Malaysia, the Philippines and Vietnam. "Any pressure like this will cause a reaction somewhere else that will result in liberalisation," says Harbison.
Thai LCCs have more flexibility than Singapore's three LCCs because Thailand has an open skies agreement with China. Nok Air, Orient Thai and Thai AirAsia were already planning to launch flights to China this year.
Thailand and Singapore also have a liberal bilateral, which allows Singapore's LCCs to raise capacity to Bangkok. They may also direct some capacity to other unaffected Thai destinations such as Pattaya, which is already served by Jetstar Asia, and Chiang Mai.
Only one of Singapore's three LCCs, Tiger Airways, serves Phuket. But Tiger had planned to add capacity on the route this month and the other two may have begun Phuket flights, with some of the several additional aircraft to be delivered later this year.
It is hard to predict how long it will take for the Phuket market to recover, but officials are quick to point out most of the island is unaffected and many hotels are still operational.
"Phuket has got most of its infrastructure intact and consequently should be able to recover quickly," Harbison says, adding Asian airlines are now well prepared to help push along a market recovery with others from the tourism industry given their experiences following SARS and the Bali bombings.
"Generally, the tendency is to recover from disaster very quickly," he says. "We need to watch the situation over the next few weeks," says Nok Air executive vice-president Sehapan Chumsai. "It's difficult to analyse."
The recovery in Indonesia's Aceh province, which has accounted for more than half of the fast-increasing tsunami death toll, will be slower, but the region has limited air services and few tourists. The region of India affected also has no major airports or tourist attractions except the
BRENDAN SOBIE / SINGAPORE
Source: Flight International
