Airports urge aviation liberalisation push between EU & ASEAN

As the 1st EU-ASEAN Aviation Summit kicked off yesterday in Singapore, airports on both sides were quick to herald the benefits of opening aviation markets between Europe and ASEAN countries.

The airport trade bodies ACI EUROPE and ACI ASIA PACIFIC expressed strong hopes that the Summit will pave the way for aviation negotiations to be initiated between the EU and ASEAN within a year. These negotiations should look at removing existing restrictions to the development of air services between the two partners, integrate their regional single aviation markets and seek regulatory alignment on essential issues such as safety, security and competition.

While the overall air traffic between Europe and ASEAN countries has grown significantly over the past 15 years, an increasing share of that traffic has leaked into indirect routings via competing airport hubs in between the two blocs. As a result, passenger traffic growth on direct routings has been sub-optimal in recent years, with seat capacity actually actually decreasing by -0.3% per annum since 2009. This is abnormal considering the strength of trade relations between the EU and ASEAN and the fact that the EU is the largest foreign investor in the ASEAN.

Redressing this anomaly and realising the potential for future traffic development requires a newer, fully open and liberalised air services agreement between EU and ASEAN.

Olivier Jankovec, Director General ACI EUROPE commented “Liberalising aviation between the EU and ASEAN is not just about normalisation – it is about upping our game in response to increasing competitive pressures from other regions. It is about boosting our own position as global aviation hubs. We need to seize this opportunity for first mover advantage before others reap the full benefit of unrestricted market access.”

He added “Europe’s airports are fully behind the European Commission’s efforts to open aviation markets with the EU’s main trading partners of comparable market size. Beyond our own positioning, experience shows that consumers are the biggest winners from aviation liberalisation, and that there are other far-reaching benefits. For us as airports, it is about unleashing our potential to act as engines of economic growth for our communities – something not to be overlooked given the urgency of sustaining Europe’s economic recovery.”

Patti Chau, Regional Director ACI ASIA PACIFIC said “The Asian market – one of the fastest growing in the world – remains relatively segmented and regulated, thus undermining the competitiveness of the air transport industry and economy in the long term. In the face of globalization and increasing competition, the opening of a dialogue between EU and ASEAN on single aviation market is very much welcome.”

She added “With ASEAN Single Aviation Market by 2015, better and more liberalised regulation will drive long-term benefits, paving way for faster traffic growth, better connectivity, increased airport service quality and fair competition. We are already seeing many airports in Asia building extra capacity in anticipation of the growth this agreement could potentially bring.”