Asia: OPEC cut may call time on in-flight free drinks

Some of Asia’s marquee airlines that spoil passengers with free alcohol and in-flight entertainment may soon have to kick the habit. The on-board giveaways, famously rolled out to every passenger in the 1970s by Singapore Airlines, will be unsustainable for some carriers after OPEC’s production cuts announced last week drive up the cost of fuel, according to aviation analysts. Other options include cutting unprofitable routes, retiring gas-guzzling aircraft and raising fares. The deal reached by the OPEC on Nov. 30 couldn’t have come at a worse time for carriers such as Cathay Pacific and Singapore Air that are battling excess capacity and declining premium traffic. Asian operators are also particularly vulnerable to rising fuel costs as their profit margins are about half those of their North American peers after competition pushed down fares. In order to survive, some Asian airlines may be forced to ape US low-cost carriers and charge for extras -- ranging from food and alcohol to checked-in baggage -- that have been taken for granted on long-haul flights for decades, according to Mathieu De Marchi, a Bangkok-based aviation consultant at Landrum & Brown. “More full-service airlines in Asia Pacific might consider doing the same,” he said, declining to pick out the carriers in the region most likely to make customers pay. Fuel is typically an airline’s biggest expense and this year’s 30 percent price increase is enough to threaten the global aviation industry’s five-year run of earnings growth, according to Heathrow-based advisory Flight Ascend Consultancy.<br/>