Boeing has a positive outlook for this market. Airbus is also bullish on Asia. The forecasts are for new aircraft deliveries to treble the fleet over the next two decades. With this growth comes a requirement for improvements in infrastructure, facilities, and of course, safety. Several Asian countries and airlines are on various “black lists” for inferior regulatory (India) or safety (Indonesia) records. The disappearance of MH370 highlighted the lack of adequate radar coverage in the region. This past week we saw the kind of attention no airline wants, with the loss of AirAsia 8501 and subsequent discovery of the wreckage in the ocean.
Boeing expects about half the air travel market growth to be Asia-centric in the next 20 years. Behind the rapid growth in air travel are several rapidly growing low cost carriers. These include AirAsia and Lion Air, the two largest, who currently operate over 300 aircraft and have another 900 on order. They are setting the pace in the region.
CAPA produced a chart which illustrates the impact LCCs are having on the Asia market. This is clearly the segment to focus on when considering the future of air travel in this part of the world. LCCs have been disruptive in every market they have entered. It is no different in Asia.
Both AirAsia and Lion Air have aggressive growth plans as the next table illustrates. These airlines plan to grow their fleets and networks. AirAsia most recently started an affiliate in India. This follows affiliates in Thailand, Malaysia, Indonesia and the Philippines. Lion Air and AirAsia are ambitious.
2014 has not been a great year in Asia commercial aviation safety. The losses of MH370, MH17 and now QZ5801 have been devastating. With so much attention on AirAsia this week, the timing could not have been worse for another one of their aircraft to be involved in an incident. While it was only a runway overshoot, and everyone is safe, nerves are raw. AirAsia has until this week had an excellent safety record. But Lion Air is a different story.
Lion Air has an especially active history of accidents. There nine listed between 2002 and 2014. The airline is on the EU blacklist. In 2011 the airline failed an assessment by IATA for membership over safety concerns. Indonesia’s airline regulators are viewed by many industry observers as lax and lacking in technical expertise.
The following two images show the activity of these two LCCS in the Asian region. The first is AirAsia, and its reach is significant – from North Asia across South East Asia.
The next image shows Lion Air, which is South East Asia focused, but does have two 747s used for traffic to Saudi Arabia.
Looking ahead twenty years it would seem reasonable to assume that a significant portion of Asian traffic will be flying on LCCs. AirAsia’s AirAsia X is a fast growing long haul LCC. This idea will be copied. Rising incomes will generate significant growth in demand for air travel, not just for leisure, but also for business.
As the commercial center of gravity moves to Asia, should we expect more accidents and events from this region’s airlines? There is today a significant difference between countries in safety of operations, with Indonesia being among the most criticized and multiple Indonesian carriers banned by the EU. As traffic in the region grows, regulatory capabilities and oversight must correspondingly grow if we are do not want to see more unfortunate incidents.
How can we ensure that Asian air traffic will fly at the same level of predictably and safety for Western carriers? One way is for Asian airlines, especially the LCCs, to deploy the latest in technologies and actively learning from more experienced airlines, strengthening pilot and maintenance training. Some carriers, including AirAsia, have done that well, while others, like Lion Air and several other Indonesian carriers, appear to be taking shortcuts to earn higher profits. There can be no shortcuts in aviation where safety is the #1 issue, and regulatory oversight in Asia will need to catch up with the west if traffic is to safely grow over the next two decades.
What will that take? Better and more efficient air traffic control, better radar coverage and real-time tracking, introduction of satellite based navigation, collision avoidance systems, and better training of ATC, pilots, mechanics, with appropriate oversight. This will be costly. Should regional ATC be privatized, like that of Canada, which has been able to quickly introduce the most advanced technology available? Could a multinational infrastructural organization be established with the region to coordinate ATC? How can cooperation be increased within the region, particularly between countries with political differences?
We’ve seen these issues before, in Europe, where EuroControl provides a model of how cross-border and intra-regional issues can be addressed, while maintaining national sovereignty over airspace. A similar model is needed in Southeast Asia to upgrade aviation infrastructure in the region. Without that, we may face situations like MH370 and QZ5801 again.