Asian aviation takes off

By Elizabeth Rudd

While most of the world’s airlines and markets suffer low growth rates, Asia stands out with growth rates of 9% in 2012. Asia is one of the most competitive aviation markets with 75% of routes serviced by 3 or more carriers. Seven of the ten busiest global air routes are in Asia.
What is changing?

Air travel has long been dominated by established markets in Europe and North America but in recent years Asia is quietly becoming a large and growing market for all things aviation. According to the International Air Transport Authority (IATA) Asia is now the largest aviation market. Passenger numbers are estimated to increase by 10% per year, reaching 900 million passengers by 2020 and that estimate excludes China.

  • The Low Cost Carrier (LCC) model, which has been very successful in Europe, has room to expand in Asia. Two countries the Philippines (65%) and Thailand (61%) have high penetration of LCC but most other markets have plenty of room for LCC’s to grow.
  • The Middle East is benefiting from increased traffic between Asia and Europe with 20% increases in through-passenger numbers in 2011 and 2012.
  • Jakarta, Beijing, and Tokyo are in the world’s top 10 busiest airports.
  • Bangkok, Seoul, and Singapore airports have all experienced greater than 10% growth in passenger numbers over the last year.
  • More Chinese are travelling outside of China and the rest of Asia is benefiting, Thailand has experienced a 19% increase in passenger numbers from China for the first quarter 2013 (over 1st quarter 2012).

Much of this passenger growth can be attributed to rising incomes, as more people have disposable income many are choosing to travel and LCC are benefiting. Government, including the Chinese government, are also making it easier for their citizens to travel.

Why is this important?

Increasing passenger numbers create opportunities for the entire travel and aviation sector:

  • International hotel chains have announced expansion plans throughout Asia.
  • Between AirAsia, India’s Indigo and Lion Air (Indonesia) there are over 600 new aircraft on order.
  • The Chinese government has announced plans to build over 100 new airports.
  • Support operations including reservations, maintenance and safety will also grow in the region.

Increasingly more business and investment will take place in Asia. China’s business travel is forecast to grow 17% next year making it larger than the current world leader, the United States.

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