Growth will resume
The recent financial crisis and global recession have dampened economic growth throughout Northeast Asia, particularly in Japan where economic activity is closely tied to exports and world trade. As the world economy recovers, the region's GDP will improve to average 1.3 percent annual growth over the next 20 years. Korea's developing economy will grow at a faster rate as its industrial base broadens.
Airport capacity improvement
Airport expansion and further liberalization in Japan and South Korea will stimulate air travel and contribute to economic revitalization. Overall, air travel is expected to grow at 4.3 percent per year, while regional traffic between Northeast and other Asia Pacific regions is projected to grow faster at 5.8 percent.
Tokyo's Haneda and Narita airports will both benefit from expansion projects in 2010. The international terminal and fourth runway at Haneda Airport will increase capacity for both domestic and international flights by 40 percent. The extended second runway at Tokyo Narita International Airport will also enable growth in international services. Incheon International Airport near Seoul, South Korea, is also expanding with a new concourse, additional gates and a third runway.
Liberalization and competition
Operating restrictions between countries in the region are gradually easing. Market regulations between Northeast Asian countries and other nations in the Asia Pacific region, including China, are also being liberalized. This will encourage expansion of services into new markets.
Domestic low-cost carriers and LCCs from outside the region are showing a strong interest in this market as regulations ease and airport capacity expands. Large network carriers have also expressed interest in starting low-cost operations. Expanding low-cost service is stimulating the demand for single-aisle airplanes for intra-Asia markets. Airlines in Northeast Asia also provide significant capacity in intercontinental markets to North America and Europe. Long-haul carriers are investing in efficient twin-aisle jets to strengthen existing service and to open new markets.
Air cargo growth
The economic downturn has also affected the air cargo market in Northeast Asia. However, trade growth is projected to be particularly strong between Northeast Asia and the other markets within the Asia Pacific region. This increased trade will help drive Northeast Asia air cargo traffic to grow 6.4 percent per year, on average, over the next 20 years.
