Southeast Asia

Airlines expand operations

Southeast Asia's airlines are growing rapidly as the region continues to develop economically. Low-cost carriers (LCC) are expanding and gaining market share, stimulating passenger demand with attractive fares and new routes. Some Southeast Asia LCCs have launched subsidiaries or franchises to expand their operations into other countries or regions. A few LCCs have even ventured beyond single-aisle operations to provide widebody services that connect to destinations that exceed the range capabilities of single-aisle airplane. Network carriers have restructured to expand their product offerings for growth and increased competitiveness in the quickly developing marketplace. The heightened competition has increased the availability and affordability of air travel within the region.

Regional markets will continue to grow rapidly as ties within the Association of Southeast Asian Nations (ASEAN) strengthen, stimulating business and leisure travel. New, efficient airplanes with improved capabilities and lower operating costs are integral to carriers' business strategies. Southeast Asian airlines have dramatically increased their airplane orders to meet growing demand and to open new, direct, long-range markets. In fact, more than half of the region's forecast 2,460 single-aisle airplane deliveries over the next 20 years are already on order.

Liberalization opens routes

Regulatory changes and infrastructure improvements are crucial to air travel expansion. Relaxation of market regulations among ASEAN countries has removed many traditional barriers to growth. And flights among ASEAN capital cities have increased, marking an intermediate step in the path to a unified regional aviation market. Several carriers are aggressively expanding into new markets by acquiring or partnering with other carriers in Southeast Asia and surrounding regions. Governments and airport authorities in the region are eager to expand their aviation infrastructures and capitalize on increased trade and tourism.

Airlines bolster economic growth

International economic relationships and collaboration within the region continue to strengthen. Air transportation plays a vital role in the region's projected 4.7 percent annual GDP growth over the next 20 years. For example, affordable air travel options have stimulated growth in the region's services sector, including tourism and financial services. The region's strong air cargo operations enable efficient shipment of manufactured goods. Overall, air travel to, from, and within the region is projected to grow an average 6.6 percent annually over the next 20 years. Air travel within the region will lead with 7.7 percent annual growth, driving single-aisle airplane deliveries to reach 73 percent of total deliveries within the region.