The boom in low-cost travel and a growing web of open-skies agreements are expected to power long-term growth for Asian airlines after the global recession, industry bosses and analysts said.
Participants in the Singapore Airshow, which ended yesterday, expressed optimism that the region, particularly China, will lead the rest of the world to recovery after the most harrowing year in global travel.
The world aviation industry lost an estimated US$11 billion last year after a financial crisis that began in the US grounded travelers and forced airlines to cancel or defer plane orders.
PHOTO: AFP
Organizers of the Singapore Airshow said US$10 billion worth of contracts were done during the event, down from US$13 billion in 2008.
“We look forward to the market picking up further as the industry rides the upturn,” said Jimmy Lau, managing director of the show, Asia’s biggest civilian-military aerospace conference and exhibition.
Top aircraft makers Boeing and Airbus say Asia will be the world’s biggest airplane market in the next 20 years, with orders expected to surpass 8,000 passenger and cargo planes worth more than US$1 trillion.
A key demand driver is the explosion in budget air travel.
This has allowed many ordinary Asian families to travel by plane for the first time because of dirt-cheap fares and services to more destinations outside capital cities, ending the dominance of big national carriers.
By the latest count, there are at least 45 low-fare airlines across Asia from Japan to Pakistan. Unlike premium airlines, many of them managed to soar above the economic turbulence.
Singapore budget carrier Tiger Airways announced it has brought forward the delivery of another four Airbus A320s to next year instead of 2016, bringing to nine the number of planes whose delivery has been accelerated.
The carrier, which started flying in 2004, also announced it had flown its 12 millionth passenger — less than two months after the 11 million mark.
Garuda president and chief executive Emirsyah Satar said the Indonesian flag carrier expects to launch a budget offshoot.
John Leahy, Airbus chief operating officer for customers, said that last year Asian budget carriers flew an average 1,800km per flight to 576 airports, up from 2001 when they averaged 700km to 48 airports.
“If you put that together, you can see a growth rate compounding of almost 40 percent a year,” he said.
Market liberalization is the other growth engine, with the opening of new routes between secondary destinations, especially in China, India and Southeast Asia, enabling more people to travel by air.
“Asian aviation will not reach its potential if the airlines are constrained to old ways of doing business,” said Giovanni Bisigniani, director general of the International Air Transport Association (IATA).
IATA estimates that the global aviation industry’s losses will narrow from US$11 billion last year to US$5.6 billion this year. Asia‑Pacific airlines’ losses are forecast to fall from US$3.4 billion last year to US$700 million this year.
China and ASEAN, which have a combined population of 1.8 billion, are expected to conclude talks this year on a pact to further open up their aviation markets to each other.
Within ASEAN, the 10 member countries are looking at a deal allowing for maximum competition by 2015 as part of a regional free market.
Analysts and airline chiefs say Asia’s fragmented geography and the lack of modern rail, road and sea links make airlines an attractive travel mode.
The region’s population of more than 3 billion people also means there are enough passengers for competitors to share, they add.
Randy Tinseth, vice president for marketing at Boeing Commercial Airplanes, said opening up busy routes to more competition will make tickets even more affordable.
“When you have open skies, you have liberalization,” Tinseth told reporters at the airshow. “It opens up a level playing field.”
‘DEMOCRATIC FISH’: Soichiro Hayashi said he wants to return Taiwan’s kindness after it helped with relief efforts after the March 11, 2011, earthquake and tsunami Japanese fish farmers are ready to help Taiwan after China banned Taiwanese grouper imports, the Sankei Shimbun reported yesterday. The Chinese General Administration of Customs suspended imports of the fish on Monday last week, citing prohibited chemicals and excessive levels of oxytetracycline allegedly found in grouper imports since December last year. Soichiro Hayashi, president of the Hayashi Trout Farm in Japan’s Fukushima Prefecture, is leading the push for Taiwanese grouper imports, the newspaper said. His call has caught the attention of several large sushi chains, the report said. Hayashi, who is the Fukushima branch head of the Friends of Lee Teng-hui Association in Japan,
‘TROJAN HORSE’ SCHEME: The comment that a bridge would allow China’s PLA to easily launch an attack shows ‘a lack of backbone,’ Taipei Mayor Ko Wen-je said Critics accused Taipei Mayor Ko Wen-je (柯文哲) of being oblivious to national security concerns after he proposed constructing a bridge to link Kinmen and China’s Xiamen (廈門). Ko, who is also the Taiwan People’s Party (TPP) chairman, made the proposal when presiding over the opening ceremony of the party’s office in Kinmen on Saturday. He said the bridge could solve Kinmen’s population, electricity and garbage problems, as well as serve as a shortcut for leaving or entering Taiwan without traveling via Taipei International Airport (Songshan airport). He also proposed building a hospital in Kinmen to attract people who are seeking medical treatment in
OVER THE HUMP: In a seven-day period ending on Wednesday, the nation reported 366,628 new cases, down 19 percent from the 451,358 reported in the previous week The nation might further open up to more arrivals in the next two months, the Central Epidemic Command Center (CECC) said yesterday, as it reported 48,283 new local COVID-19 cases, down from more than 50,000 in the previous few days. Taiwan on Wednesday last week introduced a plan to allow up to 25,000 arrivals per week as part of efforts to gradually reopen borders, which includes reducing mandatory quarantines for inbound travelers from seven to three days, followed by four days in “self-initiated epidemic prevention.” The quota covers inbound Taiwanese arrivals, businesspeople and migrant workers. Former vice president Chen Chien-jen (陳建仁) yesterday said
The Ministry of National Defense yesterday said it is monitoring Chinese People’s Liberation Army (PLA) Navy ship movements near Taiwan, after the Japanese Ministry of Defense disclosed that Chinese vessels made a rare voyage between Yilan County and Japan’s Yonaguni. The Japanese ministry on Wednesday said that two Chinese navy ships on Tuesday diverted from their usual route of entering the Pacific Ocean via the Miyako Strait and for the first time traveled there between Yilan and Yonaguni. The Japan Self-Defense Forces said that it picked up the presence of China’s Type-056A Jiangdao-class corvette 220km north of Yonaguni at 9am on Tuesday. The