Air Travel In The Region Expected To Continue To Grow
The International Air Transport Association (IATA) said that
in 2009 intra-Asia-Pacific travel had eclipsed the number of
travelers in North America as the world’s largest aviation
market. Asia-Pacific’s travelers numbered 647 million
compared the 638 million who travelled within North America
(including domestic markets). By 2013 an additional 217 million
travelers are expected to take to the skies within
“Achieving Asia-Pacific’s tremendous potential is
contingent upon short-term efforts to battle the impacts of the
economic downturn with cost reductions and efficiency gains.
Longer-term Asia-Pacific must also face global challenges including
environment, security and liberalization,” said Giovanni
Bisignani, IATA’s Director General and CEO at the start of
the Singapore Air Show Aviation Leadership Summit.
The global aviation industry is expected to reduce losses from
$11.0 billion in 2009 to $5.6 billion in 2010. The loss reduction
is being led by Asia-Pacific’s carriers who are expected to
see their losses shrink from US$3.4 billion in 2009 to US$700
million in 2010. “Asia-Pacific’s prospects are
improving faster than other regions,” said Bisignani.
Bisignani noted that the Asia-Pacific region is diverse, dynamic
and with great potential. Asia-Pacific is home to two of the
world’s top five airlines in terms of profitability. At the
same time, the region’s governments provided over US$10
billion in government bailouts to airlines in the first quarter of
the year. The region’s two biggest growth markets—India
and China—face completely different circumstances.
India’s challenge is to reduce costs and improve
infrastructure, while China is adjusting to new global trade
Meanwhile, he said, over the last decade China replaced Japan as
Asia-Pacific’s largest player. Today China’s fleet is
1,400 aircraft compared to Japan’s 540. Its domestic market
of 5.7 million weekly seats is more than double Japan’s 2.6
million and China’s 1.4 million weekly international seat
market is now slightly larger than Japan’s 1.3 million.
Finally, Bisignani (pictured, right) pointed out that, in
the US, there are three aircraft seats per year for each of the 300
million people who live there. China’s population of 1.3
billion is served by only 0.3 seats per person and India’s
1.1 billion population has only 0.1 seats available per person.
“The global air transport industry will triple in size when
Asians travel as much as those in the US,” said
“Asia-Pacific’s diversity, dynamism and potential
are a great opportunity. Rapidly developing markets are defining
aviation’s future. Is Asia-Pacific prepared for the
challenges that this will bring?” said Bisignani. In his
opening address, Bisignani highlighted three global issues for
Asia-Pacific leadership: the environment, security, and
The global aviation industry presented the UNFCCC Climate Change
talks in Copenhagen with three targets shared by airlines,
airports, air navigation service providers and manufacturers. These
are: improving fuel efficiency by an average of 1.5% per year to
2020, stabilizing emissions with carbon-neutral growth from 2020
and cutting our emissions in half by 2050 compared to 2005. These
targets are backed by a clear strategy based on technology
investment, effective operations, efficient infrastructure and
economic measures. “Even without a binding agreement in
Copenhagen aviation is united and committed to its targets. The
ICAO Assembly in September-October is an opportunity to build
government consensus leading to COP-16 in Mexico,” said
The challenges for Asia include working through ICAO to
accommodate the diverse needs of the region, taking advantage of
the tremendous business opportunities in developing sustainable
second generation biofuels Biofuels have the potential to
reduce aviation’s carbon footprint by up to 80%. “Five
airlines have successfully tested biofuels and we expect
certification within 2011 at the latest. Aviation biofuel is a
US$100 billion plus business opportunity. And I hope that this
region will play a key role in its early development,” said
On the issue of security, Bisignani said “We live in a
global world—global connectivity and global threats.
Governments and industry must protect the connectivity and
eliminate the threats. That challenge requires industry and
governments to work together for effective and efficient security
He said the Asia-Pacific region must define government/industry
cooperation on security and find a better way to deal with the cost
burden. Currently airlines pay US$5.9 billion a year for security.
“These are national security measures. That is a government
responsibility, including the bill,” said Bisignani.
Finally, Bisignani called for a liberalization of market access.
“Asian aviation will not reach its potential if the airlines
are constrained to old ways of doing business. Industry is
preparing for regional liberalization of market access with the
ASEAN target date of 2015. It is important that the target date is
met. This is already well-behind the industry leading developments
in the US-EU Open Skies agreement. Second stage talks will conclude
this year with ownership being the most important issue,”
“To move liberalization forward, IATA took the
extra-ordinary step of calling governments together with
IATA’s Agenda for Freedom. After a year of talks, in
November 2009, seven governments, including the US, the European
Commission, Singapore and Malaysia signed a multilateral statement
of policy principles. These principles preserve a level playing
field while addressing liberalization of market access, pricing and
ownership. The challenge for Asia is to implement these principles
in the region’s bilateral arrangement,” he said.
The Singapore Air Show runs through February 7th.