Three Asian airlines announce plans to expand as the industry begins to recover from a slump. But the International Monetary Fund, however, warns that economic growth in Asia could easily be stalled this year.
Malaysian Airline System has agreed to buy six super jumbo jets from the European-manufacturer Airbus. The passenger carrier is expected to pay about $1.5 billion for the jets. The first super jumbos should arrive in Malaysia in 2007. Airbus is still developing the A3-80 jets, which will be the biggest passenger planes in the world when they take to the skies in 2006.
In Hong Kong, Cathay Pacific Airways says it is adding three nonstop flights to London each week starting in June. That will give it 21 nonstop flights, more than any other airline flying out of Hong Kong. Cathay's subsidiary Air Hong Kong also plans to buy six new Airbus jets so it can expand around Asia. The cargo hauler did not say how much it will pay for the jets, but did say it has an option to buy four additional aircraft.
The expansions come as airline analysts in Asia say the region's stronger carriers are beginning to recover from the worldwide travel slump that began in 2001 with the September 11 terrorist attacks in the United States. The International Monetary Fund, however, warns that Asia's economic growth, as well as the region's travel industry, could easily stall this year.
IMF executive Thomas Dawson told journalists in Hong Kong that although most Asian economies are expected to grow by more than three percent, they could be impacted by pending factors, such as a possible war in the Gulf region, a continued U.S. economic slump or a return to recession in Japan. He says one of the greatest risks would be new terrorist attacks, like that one that killed almost 200 people in Bali last October. "Clearly the economic cost of dealing with the attacks is high, whether it's security surveillance, insurance premiums or whatever. Tourism, obviously, as well."
In Singapore, there already are signs that economic growth this year may be fitful. The government reports that last year's bankruptcies soared to a 17-year high. Over 3,580 people filed for bankruptcy, up 11 percent from 2001. In 2002, 265 companies shut down, up five percent.
Singapore's economy last year grew by about two percent, but the government warns the economy easily could slip back into recession.