Centre for Aviation Studies

Centre for Aviation Studies

Growth of Aviation Markets in Pacific Rim, China, South east Asia, South Asia, India and Middle East By Prof K C Gandhi Centre for Aviation Studies University of Petroleum & Energy Studies

5/2/2008 Prof. K.C.Gandhi * Source (Airbus Outlook 2007) 3

5/2/2008 Prof. K.C.Gandhi 4

Few Important facts about Asia Pacific Overall, air traffic in Asia-Pacific will Increase at a rate 1.8 times higher than GDP 5/2/2008 Prof. K.C.Gandhi * Source (Boeing CMO 2007) 5

Asia Pacific Trends towards liberalization Increased Competition from start ups Travel demand growing above world level Pilot shortage (in India Japan &China) Regional Data for Passenger Aircraft 5/2/2008 Prof. K.C.Gandhi * Source (Boeing CMO 2007) 6

China China will account for 12 percent of world demand for airplanes. China has a young fleet and higher proportion of airplanes are leased Chinese mainland carriers growth Statistics: a) Pax. 15.9% b) Cargo 15.4% Increased deregulation to spur China s economic development Rising foreign investment and low labor rates supporting cargo growth China also facing pilot shortage 5/2/2008 Prof. K.C.Gandhi * Source (Boeing CMO 2007) 7

Northeast Asia Prosperous economies, growing national travel demand, and expanding links to China. Hub development in Tokyo and Seoul Cooperation between airlines in Northeast Asia and China will continue to increase as exemplified by recent agreements between ANA, Asiana, Air China, and Shanghai Airlines. Recent multilateral air service agreements among China, Japan, and South Ko will play a large role in developing air travel. The region has greatest growth potential in Tourism and Cargo with strong business ties 5/2/2008 Prof. K.C.Gandhi * Source (Boeing CMO 2007) 8

South West Asia (including India) New bilateral air service treaties are permitting greater market access, additional seats, higher frequencies, more airlines, and new airport pairs. Market liberalization have made Southwest Asia, the 2nd fastest growing passenger market in the world. More than $9 billion in public and private financing is being invested over the next 3 years to improve and modernize India s airports. Market revolving around Mergers and Acquisitions. 5/2/2008 Airlines offer travelers the opportunity to reach their destination in a fraction of the time required by train at fares that are competitive with air-conditioned rail. Prof. K.C.Gandhi * Source (Boeing CMO 2007) 9

Indian Highlights: Airport Open to Private Player DEL & BOM-GMR & GVK-Brown field HYD & BLR-New Green Field 35 non-metros being upgraded Adoption of Montreal Convention for unification of the rules of baggage/cargo and death liability of the carriers Airport Economic Regulatory Authority Bill in the Parliament To fix review and approve tariff for aeronautical services To fix User Development Fee To Monitor the set performance standard 5/2/2008 Prof. K.C.Gandhi 10

Indian Highlights: Pax Traffic Growth: 32.51% In 2007-82 airport are functioning instead of 75 in 2006 Bilateral agreements,7 in 2007,12 in 2006 and 15 in 2005 ( Ref DGCA) Business Growth is 27% due to liberalization 5/2/2008 Prof. K.C.Gandhi * Source (CAM) 11

South East Asia Air transport is a key component of ASEAN s Ten Nations, One Community goal, stimulating trade and investment, fostering leisure travel, and promoting tourism. Open Sky will be an important component of the overall economic integration of ASEAN. ASEAN s plan for further liberalization of international air links will drive continued strong growth. Low-cost startup airlines have expanded in both domestic and international markets. 5/2/2008 Even established as flag carriers to take advantage Prof. K.C.Gandhi * Source (Boeing CMO 2007) 12

Oceania (Australia) Australia and New Zealand have achieved greater integration into the global economy through major macroeconomic restructuring. The region is strongly focused on inbound tourism and anticipates higher growth in the near future. The region s airlines have booked significant numbers of new airplane orders to support expansion plans like - Qantas, Air New Zealand, and Air Pacific. 5/2/2008 Prof. K.C.Gandhi Australia expanded its bilateral agreements with the UAE and Qatar which provide greater market access to competing airlines between Australia and the Middle East, as well as inbound from Europe. * Source (Boeing CMO 2007) 13

Middle East Ambitious growth plans, modern air transport infrastructure, and a central world location Air travel has grown faster in the Middle East than in any other world region, averaging more than 12 percent for each of the last 5 years They have exploited their geographic location to connect passengers traveling between Europe, Asia, Africa, Oceania, and recently, the Americas Growth opportunities in the Middle East are being driven not only by geography, deregulation, liberalization, and economic growth, but also by the region s demographics 5/2/2008 Prof. K.C.Gandhi 14 * Source (Boeing CMO 2007)

Asian Aviation is unique in many ways!!! Firstly, no regional organization looking after the interest of Aviation in Asia as a whole Secondly, International Mega Carriers and much smaller International Airlines co-exist harmoniously without devouring each other Thirdly, the Asia/Pacific region has the largest share of the world s economy experiencing the highest rate of growth among the regions in the Aviation Industry 5/2/2008 Prof. K.C.Gandhi 15

Asia s aviation sector is poised for strong growth but faces many challenges; Strong Leadership is essential in the coming years 5/2/2008 Prof. K.C.Gandhi 16

Thank you Email id: kcg@upes.ac.in 5/2/2008 Prof. K.C.Gandhi 17

Ten Countries of ASEAN BRUNEI/DARUSALAM COMBODIA INDONESIA LAOS THAILAND MALAYSIA SINGAPORE PHILLIPINES VIETNAM MAYANMAR 5/2/2008 Prof. K.C.Gandhi 18