Open skies, budget trips; Asian airlines set to soar

SINGAPORE: 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 today 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 $11 billion in 2009 after a financial crisis that began in the United States grounded travellers and forced airlines to cancel or defer plane orders.

Organisers of the Singapore Airshow said $10 billion worth of contracts were done during the event, down from $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 over one trillion dollars.

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.

John Leahy, Airbus chief operating officer for customers, said that last year Asian budget carriers flew an average 1,800 kilometres per flight to 576 airports, up from 2001 when they averaged 700 kilometres to 48 airports. “If you put that together, you can see a growth rate of almost 40 per cent a year,” he said.

Market liberalisation is the other growth engine, with the opening of new routes between secondary destinations.