Singapore air fares forecast to increase 10% this year:HSBC

IATA believes passenger yields will be stable in 2011, said HSBC.

Their work in supply and demand plus their survey of corporate travel agents suggests a more positive outlook.

HSBC surveyed 15 travel agents and corporate travel related companies.

While clearly it is difficult to read too much into the magnitude of the fare rises suggested, a number of conclusions can be reached.

All of HSBC's conversations during the survey indicated that underlying fares (i.e. excluding fuel surcharges) would rise y-o-y in 2011.

Replies were more positive in connection with the Hong Kong and Singapore markets.

Demand for premium travel is likely to be stronger than economy class travel.

HSBC also expects that after the boost from restocking in 2010 plus the low base in 2009, air freight volume growth rates will return towards the long-term trend levels in 2011.

Based on HSBC's forecasts of global GDP growth forecasts, Asian exports and world semiconductor sales, we estimate Asian air cargo volume growth rates of 7-8% in 2011.

Cargo markets in Hong Kong, Taiwan, Korea, Singapore and Japan appear to be generating moderate growth.

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