Asian airlines face capacity surplus

Despite a looming global recession and softening demand, Asian airlines continue to increase capacity, hurting profits.

Economists often say that recessions are good for business. They help companies cut the boom-year excesses, and those that survive, come out stronger and nimbler on the other side. But while US airlines are proactively cutting flights, Asian air carriers remain set on capacity growth even as the credit crunch intensifies.

Airlines worldwide are being slammed on two fronts. The global credit crunch has reduced passenger demand, especially that of lucrative business travellers. At the same time, fuel prices have...

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