South-east Asian air travel boom expected on low-cost carrier growth: Boeing
SOUTH-EAST Asian air passenger traffic will grow by 5.7 per cent a year until 2039, the second-fastest pace of expansion in the world, one industry report has said.
The projected annual growth in South-east Asian passengers trounces the global average of 4 per cent, and comes in second to the 7 per cent ramp-up in South Asia.
Meanwhile, domestic air travel within Asean is poised to become the world’s fifth-largest market within the decade – up from seventh-largest in 2019 – while intra-China aviation will pip both the North American and European markets to take pole position worldwide.
That’s according to the 2020 South-east Asian commercial market outlook from aerospace company Boeing, which was released on Thursday.
South-east Asian passengers could make up 15 per cent of global air traffic in 2039, up from 12 per cent in 2019, with an estimated 934.5 billion revenue passenger kilometres (RPKs) within the Asean region alone, and another 531.6 billion RPKs in China-Asean travel.
“Low-cost carriers (LCC) remain a key growth driver in South-east Asia. Having more than quadrupled its capacity over the last 10 years, the business model’s lower fare offering continues to stimulate new demand in the emerging market,” the report said.
“Liberalisation within Asean has also enabled more LCC entrants to compete in intra-regional routes and establish offshoots to further increase their market presence.”
Even network carriers are upping their capacity in short-haul and point-to-point routes, the report added, while the long-haul trend is for more connections between direct city-pairs and “sixth-freedom” routes that stop over in airlines’ home markets.
By 2039, regional operators will need another 3,480 new single-aisle aeroplanes, up from 1,140 in 2019, Boeing estimated. Single-aisles, which are expected to drive capacity growth in South-east Asia, could make up 78 per cent of fleets by then.
Darren Hulst, vice-president of commercial marketing at Boeing, called the fundamental growth drivers in South-east Asia “robust”.
Besides a growing middle class and rising private consumption, “governments in the region continue to recognise the travel and tourism sectors as important drivers of economic growth”, Mr Hulst said, quoting the report.
Asia, excluding China, was Boeing’s top market outside the US in 2019, but was overtaken by Europe and the Middle East the next year.
Not counting China, the Asian region contributed about one-fifth of non-US revenues for Boeing in 2020.