2012 ASEAN Commercial Aviation Asia Pacific Market InsightsFrost & Sullivan’s commentary on the Aerospace & Defense market addressing opportunities, best practices, and major events “We accelerate growth”
ASEAN Commercial AviationOverviewThe commercial aviation market consists of airports, airlines, MRO, general aviation, aerospace manufacturing,and aviation training. The scope of this market insight focuses on the airports and airlines segments ofcommercial aviation across 5 ASEAN countries, namely; Malaysia, Singapore, Indonesia, Thailand andPhilippinesOutlookRecently, ASEAN countries have been experiencing increasing demand for air transport due to the region’seconomic development, increasing trade and rising living standards. However, certain challenges such asregulatory issues, lack of funds and lack of infrastructure and trained staff are set to hinder growth of aviation inthe ASEAN region. Countries in the region are taking heed of these challenges and are engaging in plans todevelop air infrastructure, reform existing policies and engage in deregulation of air travel to promote growth ofthe industry. ASEAN has seen high growth of airport development during 2010 to 2012. The region had a total of1,189 airports during 2012, an increase of 21 airports from 2010. However, the total number of airports in thisregion is expected to increase only 5 airports during 2012 to 2017. Some development plans include Malaysia’spositioning of KLIA airport as a regional hub airport with more number of transit passengers and cargo beinghandled along with the building of 2 new LCC airports in the country by 2015. Other countries engaging in airportconstruction and expansion plans include the Philippines, Indonesia and Vietnam. Figure 1 shows passengerthroughput across major ASEAN countries’ airports from 2011 to 2014.Figure 1: Passenger Throughput across ASEAN airports (2011 - 2014) As shown, total passenger throughput from ASEAN airports 250 4.5% is expected to reach 233 million passengers by 2014 from 4.0% 200 3.5% 211.3 million passengers in 2011 growing at a CAGR of 3.0% 3.3% during this period. Thailand contributed the highest 150 2.5% passenger throughput in its main airports with 52.7 million 2.0% 100 1.5% passengers handled in 2011, almost 25% of ASEAN 50 1.0% passenger throughput and is expected to be the largest 0.5% contributor from 2011-2014. However, in terms of growth 0 0.0% rate the country contributes the least, just having a 2.6% 2011 2012 2013 2014 Indonesia 48.6 50.6 52.3 53.7 average rate of passenger growth during 2011 to 2014. Malaysia 46.4 48.2 50 51.8 Comparatively, the Philippines, having the least market Philippines 24 25.3 26.5 27.5 share of only 24 million passengers handled during 2011 Singapore 39.6 41 42.1 43.1 (or 11.4% of ASEAN passenger throughput), is expected to Thailand 52.7 54 55.4 56.9 show the highest growth rate growing at an average of 4.6% from 2011-2014. Growth Rate 4.0% 3.7% 3.3% 3.0% Source: Frost & SullivanOn the airlines front, the introduction of LCCs by ASEAN countries has also increased regional competition.Countries such as the Philippines and Malaysia have been showing a high LCC Penetration rate of 52% and 55%respectively by number of seats. Vietnam, one of the smallest players in ASEAN has launched its own nationalLCC, Viet Jet Air in December, 2011 and is poised for high LCC penetration in the near future with the launch ofanother LCC by 2014. Currently, many ASEAN countries’ governments are implementing policies aimed attriggering growth of aviation, however at a slow pace. In attempts to boost aviation growth in the region, all 10ASEAN countries are engaging in ASAM (ASEAN Single Aviation Market) which aims to implement open skiesagreements amongst member countries to broaden air connectivity.ConclusionThe growth of commercial aviation in ASEAN is set to be driven by rising demand for air travel, and increasingeconomic development and trade in the region. With more routes being opened up in the region, it will beessential for accelerated airport development in the region as some countries such as Indonesia, Thailand andPhilippines have limited capacities in their airports and need to undertake expansion plans to keep up with trafficgrowth.