After 12 long years of nothing promising for harmonizing Southeast Asian trade relations, there was a surprise development in the closing days of 2013 when a trade agreement was finally struck in Bali. Not glamorous, and focused largely on streamlining mundane processes that can impede cargo as it travels across borders, the agreement nevertheless holds considerably promise in terms of the growth of air travel and cargo.
Air Transport and Cargo
News and issues relating to international air transport and cargo carriers, national airlines and regional airlines, including aircraft, engines, personnel, acquisitions, accidents, safety, security and training.
The Single Aviation Market (SAM) of the 10-member Association of Southeast Asian Nations (ASEAN) is not coming about as fast as some had hoped–the aim had been by 2015. This is despite the advantages they see through liberalization of air services under a single and unified air transport market.
Southeast Asia benefits from having one of the fastest growing economies in the world, driven by the expansion of the trade and tourism sectors.
The operator of Cambodia’s three international airports recently received more than $100 million for upgrades in an effort to accommodate strong passenger growth driven by the country’s nascent tourism industry.
Two of the fastest growing airports in Southeast Asia plan to invest in new communications and navigational systems to cope with increasing air traffic. Malaysia’s Ministry of Transport (MMOT) said it will invest $212 million to build a new air traffic control center at Kuala Lumpur International Airport (KLIA) to replace the existing 20-year-old system at Sultan Abdul Aziz Shah Airport, 15 miles outside the city. In Manila, officials have committed $1.1 million to replace malfunctioning 18-year-old Doppler omni-directional radio range and distance-measuring equipment at Ninoy Aquino International Airport (NAIA) with a communication surveillance/air traffic management system.
As carriers in emerging markets mature, their fleet support needs account for an ever-increasing part of their operating budgets. Indonesia’s LionAir, for one, has begun the process of investing directly in the upkeep of what it expects eventually to become a 700-strong fleet with a new $250 million heavy maintenance facility at Hang Nadim International Airport on the island of Batam called Batam Aero Technic.
For Brazil’s Embraer, a lot has changed in the 13 years since it first laid brick and mortar in Asia. The world’s major airframe makers now consider China, for example, the second biggest market for airliners in the world, and Embraer’s establishment, first, of an office in Beijing, and later, of a joint venture to build ERJ 145 regional jets in Harbin has proved prescient.
With its diverse geography and increasingly prosperous and mobile populations, Southeast Asia has become a target of opportunity the world’s regional aircraft OEMs can no longer afford to overlook. One of the earliest to tap the region’s potential, Franco-Italian turboprop maker ATR, has for the past 15 years developed a visibility in the region unmatched by its competitors. While others concentrated on the U.S. and Europe, ATR, perhaps out of necessity, took to exploiting less obvious opportunities in developing markets within Vietnam and Thailand, for example.
The U.S. Federal Aviation Administration has downgraded its International Aviation Safety Assessment (IASA) program rating of India from a Category 1 to a Category 2 based on a recent reassessment of the country’s civil aviation authority. Under Category 2, India’s airlines can continue to fly existing service to the U.S., but they cannot establish any new service until the FAA reinstates the country’s Category 1 status.
Year-end 2013 financial results from the newly reconstituted American Airlines Group have quickly established that the long-awaited merger of AMR Corporation with US Airways has resulted in a carrier more viable than the sum of its previously separate parts.