Airlines, tourism authorities and industry analysts expect the devastating 26 December Indonesian earthquake and tsunamis to have only a short-lived impact on travel to some of the affected south and South-East Asian areas.
While cancellations and a sharp drop in forward bookings is being seen to traditionally popular resorts such as Phuket, in Thailand, this is expected to be temporary, say most, in part because the infrastructure is largely intact in many destinations. Emerging low-cost airlines may also help with the recovery by stimulating the market, while the major airlines and the tourism industry have experience in dealing with the aftermath of crises - for example after the 2002 bombings on the Indonesian island of Bali and following the SARS outbreak of March-July 2003.
"Asia's aviation and tourism industry enters 2005 with yet another challenge to overcome, following devastating tsunamis, which affected communities and tourism destinations around the Indian Ocean rim," says the Centre for Asia Pacific Aviation (CAPA), the influential consultancy. "But Asia's aviation and tourism industry has demonstrated remarkable resilience in this era of the constant shock syndrome, and will pull through this latest setback strongly. Once again, the main focus for the industry will be to overcome negative perceptions generated in the minds of travellers by media coverage. Travellers from some particularly sensitive outbound markets, such as Japan, could be discouraged over the short term."
As would be expected, airlines reported sharp drops in demand to affected tourism destinations that had been growing in popularity, such as Sri Lanka, the Maldives and Phuket. But the clean-up operations are continuing and a large percentage of resorts in these destinations remain operational, giving rise to expectations that demand will return relatively quickly. In addition, while the destruction is beyond comprehension in many of the worst-affected areas, such as Indonesia's Aceh province, there were only limited air services to these places and few foreign visitors.
Singapore Airlines unit SilkAir, which flies mainly to secondary holiday destinations in Asia, reduced services to the Thai destinations of Phuket and Krabi following an "initial downturn in demand" early in January, but it expects a recovery to materialise soon. "The local communities are doing a wonderful job of cleaning up and repairing damaged infrastructure and properties. In many cases, the beach resorts are fully functional," it says of Phuket and Krabi.
As a result, SilkAir is only reducing frequencies and not cancelling services outright. Other airlines that reduced or suspended services to affected areas also generally said they were only making temporary cuts and demand was expected to return. They were also quickly able to reallocate capacity to other areas of their networks, meaning the financial impact on most airlines will be light. Perhaps the most affected will be Thai Airways International and SriLank an Airlines, say some analysts, but the future for both of these carriers is by no means considered bleak as a result of the tsunami effects.
Low-cost airlines that are now being established in the region - many serving resorts in South-East Asia - may also help with the recovery as they can bring back demand with attractive airfares, say industry observers. CAPA says: "The increased presence of low-cost carriers serving southern Thailand, combined with the marketing strengths of Thai Airways and the Tourism Authority of Thailand and support of industry groups like the Pacific Asia Travel Association and Association of Asia Pacific Airlines, should quickly restore demand through attractively priced travel."
While the world has not faced a natural disaster that caused so much devastation in living memory, Asia is by now experienced in dealing with crises. And if there is one thing the region's airline sector has shown recently, analysts add, it is its ability to bounce back quickly from downturns.
NICHOLAS IONIDES SINGAPORE
Source: Airline Business
