Asia-Pacific Will Rule the Skies in Plane Sales

Oct. 24, 2013
Asia-Pacific's burgeoning air travel demand will make it the world's largest aircraft market over the next two decades, with Southeast Asia constituting a substantial part of it.

Oct. 24--Asia-Pacific's burgeoning air travel demand will make it the world's largest aircraft market over the next two decades, with Southeast Asia constituting a substantial part of it.

The region, spanning Russia to New Zealand and Japan to Afghanistan, will acquire up to 12,820 aircraft worth US$1.89 trillion from 2013-32, according to the latest market outlook report from the US plane maker Boeing.

That will peg Asia-Pacific's share of the 35,280 global aircraft deliveries expected over this period at 36.3%, with their value accounting for 39.4% of the $4.8 trillion worth of aircraft sales worldwide.

For the Southeast Asian subregion, commercial aviation fleets will almost triple in size over the next 20 years, during which it will need 3,080 new planes worth a combined $450 billion.

Randy Tinseth, the vice-president for marketing at Boeing Commercial Airplanes, told a briefing in Bangkok on Tuesday that Southeast Asia is projected to be one of the highest passenger traffic growth markets in the world.

Over the next 20 years, the strong emerging Asean economies will drive passenger growth through strengthened business and leisure travel, he said.

Driven by projected annual economic growth of 4.7% over the two decades, Boeing sees traffic within Southeast Asia rising by 7.5% a year.

Three-fourths of Southeast Asia's new aircraft over the period will meet incremental market demand, while 23% will replace older, less fuel-efficient aircraft.

The highest demand for new aircraft in this region will be for single-aisle twin-engine jets such as Boeing's 737 Next Generation and the new 737 Max, which together will represent 70% of all aircraft delivered here during the period.

These jetliners are a popular choice for fast-growing Southeast Asian low-cost carriers (LCCs), in which they had no presence just 13 years ago but accounted for 22% of the regional airline market size last year and will jump to 42% by 2032, said the American executive.

The market share of legacy network airlines is projected to shrink to 58% in 2032 from 78% last year.

Southeast Asia will also require 780 small and mid-sized twin-aisle planes such as Boeing's 787 Dreamliner and long-range 777-300ER over the period, worth a combined $220 billion.

But regional demand for large twin-aisle jets such as Boeing's new 747-8 Intercontinental jumbo jet will be limited to just 50 with a combined value of $20 billion.

Mr Tinseth said Indonesia, Malaysia and Thailand will lead the growth in Southeast Asia's aviation market and aircraft acquisition.

He listed economic growth, aviation deregulation, expanding middle-class populations and robust tourism industries as drivers for regional aviation markets.

Southeast Asia has an order backlog of 1,525 aircraft, 81% of which are single-aisle jets like the Boeing 737-800 and the rival Airbus 320. A large part of the backlog includes orders placed by LCCs such as AirAsia and Lion Air.

Copyright 2013 - Bangkok Post, Thailand