The development of open skies policies in Southeast Asia will drive the expansion of the region’s aviation industry, a new report has stated.
In its ‘Southeast Asian Aviation’ report, Frost & Sullivan Asia Pacific said that open skies policies would lead to increased flexibility, route coverage and profitability among Southeast Asian carriers.
“The ASEAN aviation market will develop significantly in the next few years with considerable increases in infrastructure investment and planned policies in the making which will encourage this growth momentum,” said Neil Dave, Frost & Sullivan’s Consulting Analyst for Aerospace & Defense.
“Consumers will look to benefit from increased choice of destinations, routes and greater affordability with rising standards of living and cost-savings passed down from airlines due to improved efficiency and maximisation of profits,” he added.
According to Frost & Sullivan, the demand for a “well-knit air travel infrastructure system” and an increasing demand for low-cost travel are the main drivers of ASEAN open skies policy implementation.
“Many ASEAN countries currently lack comprehensive and well developed ground transport infrastructure and countries in these regions are divided by vast seas, therefore there is a demand for a well-knit, flexible air-transport system.” added Dave. “Also, with the increasing popularity of air travel as mode of transport, there is a rise in demand for low-cost travel among countries in the ASEAN region which are not connected.”
The Frost & Sullivan report warned however, that the implementation of open skies policies may have some negative impacts for ASEAN airlines. “Stiff competition from mature, foreign players may eventually squeeze out smaller players from a developing aviation industry leading to loss of aviation related jobs,” the report stated.
Frost & Sullivan also noted that there are still several restraints in the implementation of open skies policies in the ASEAN region, including a lack of infrastructure in certain countries. In the long-term however, the report said open skies policies would bring about “real and spill-over benefits” to the region.
“The management of concerns regarding aviation safety, security, tariffs and fair competition will be fundamentally critical to the succession of open skies policies in the ASEAN region. However, with these kinks and issues ironed out in time, ASEAN as a region can look to benefit heavily from the implementation of these policies,” Dave concluded.