By San Peng
LAST year was a bumper year for air travel in Asia. The region was the fastest-growing and most competitive market in the world, experiencing year-on-year growth of nine per cent. It also accounted for seven out of the 10 of the busiest air travel routes, according to Amadeus (a leading provider of advanced technology solutions for the global travel industry). Asia was deemed the most competitive aviation market with 75 per cent of routes served by three or more airlines. The region also handled the largest number of passengers – 787 million – last year.
Since 2009, Asean has also been pursuing, in stages, the open-skies policy (which is supposed to be implemented fully by 2015). This has led to an explosion of budget-airline travel, led by AirAsia, Indonesian budget carriers Lion Air (the biggest customer of both Boeing and Airbus) and Malindo, and the Philippines’ Cebu Pacific.
The International Air Transport Association (IATA) estimates similarly that by next year, Asia-Pacific will account for 30 per cent of all passengers. In the case of Southeast Asia, the region is home to more than 600 million people with two of the world’s top 20 busiest airports – Bangkok’s Suvarnabhumi and Singapore’s Changi. Asean’s goal is to create a common market by 2015, which means lower trade barriers and a free flow of labour. With the liberalisation of its aviation sector, there will be no longer restrictions to adding flights. For example, Malaysia and Thailand can add any number of flights between the two countries as long as either airport has landing slots.
With this kind of scenario, is it any wonder that airlines from all corners of the globe are rushing to the region to get a slice of the action. In the case of Kuala Lumpur International Airport (KLIA), Malaysia Airports Holdings Berhad reports that its airports handled 14.2 million passengers in the first quarter of this year, an increase of 12 per cent from the same period last year. Last year, MAHB handled 39.9 million passengers.
This insatiable demand for air travel in Asia is what prompted several traditional airlines (“full-service airlines”) to reassess their long-haul alliances and commercial presence in Kuala Lumpur. KLIA opened at the height of the Asian financial crisis and a couple of years later, Qantas, British Airways (BA), Lufthansa and All Nippon Airways (ANA) ceased flying into KLIA for commercial reasons. Today, only ANA is back.
For instance, after a two-decade gap, Air France returned to KLIA on April 23. It will serve Paris three times a week. Air France chairman and chief executive officer Alexandre de Juniac was candid about its return to KLIA. “We are here for the margins and traffic.”
Its targets are Malaysian tourists and businessmen and de Juniac is projecting loads of more than 80 per cent.
The other legacy airlines that are making a comeback to KLIA are Philippines Airlines (PAL) and Turkish Airlines. PAL is here after a seven-year hiatus and its assistant vice-president Josen Perez de Tagle said that reopening of the Manila-KL route “will make Manila a gateway to Asia, Australasia, the United States and Canada. Such interconnectivity will benefit Malaysian tourists and corporate travellers alike.”
Turkish Airlines is back after a decade and expects its load factor to average about 80 per cent, reports The Star on March 15. It was no longer a point-to-point airline but a network airline, meaning connectivity to Europe, the Middle East and greater Asia. Almost 23 per cent of its revenues are derived in Asia.
MAHB senior general manager (operations) Datuk Azmi Murad told Bernama on May 22 that MAHB has “undertaken several initiatives to attract airlines to KLIA”. He disclosed that one of the initiatives was free aircraft parking for airlines flying to new destinations in the country.
The return of Air France, PAL and Turkish Airlines points to the strong growth in the region compared with the struggling eurozone. Other airlines are watching their development keenly – already BA and Qantas are exploring alliances here. BA belongs to the oneworld alliance – in which Malaysia Airlines joined recently – and is rumoured to be making comeback by 2015. In Qantas’ case, it has partnered Emirates and may use KLIA as a stop for the Europe-Australia route.
MAHB is hoping that what appears like a trickle will soon turn into a deluge with legacy airlines, such as Lufthansa.