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Asia-Pacific has become the world’s biggest aviation market

Tuesday, February 2nd 2010 - 12:57 UTC
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China with 1.400 passenger aircraft and a weekly domestic market of 5.7 million seats has become the region’s largest player China with 1.400 passenger aircraft and a weekly domestic market of 5.7 million seats has become the region’s largest player

The Asia-Pacific region has now become the world's biggest aviation market. With 647 million passengers in 2009, it overtook the North American market by about nine million passengers and according to the International Air Transport Association, IATA, Asia's market share will grow further to almost one third by 2013.

“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 Monday of the Singapore Air Show Aviation Leadership Summit.

The global aviation industry is expected to reduce losses from 11 billion USD 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 3.4 billion in 2009 to 700 million USD in 2010. “Asia-Pacific’s prospects are improving faster than other regions,” said Bisignani.

Bisignani also pointed out that the Asia-Pacific region 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 10 billion USD 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 patterns.

Furthermore 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.

The Asia-pacific potential is also enormous. 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 Bisignani.

“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:

However 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” said Bisignani.

Categories: Economy, International.

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