Asean air deregulation stalls

If Asean had fully implemented an open-skies policy over the last 15 years, the growth of its aviation would have been greater and the economic benefits even more widely distributed.

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That is the argument put forward in "Asean Tourism and Air Liberalisation — Really Ready for Take-Off?", a new joint report by and the Pacific Asia Travel Association (Pata).

The report shows that, if uninhibited, low-cost carrier (LCC) networks expand rapidly and create "new markets, new destinations and new economies".

This has been seen clearly in Germany, Spain and the US — but only to a degree in Southeast Asia, despite the region being a new tourism hotspot.

The authors, Carolyn Childs of and Chris Flynn of Pata, say rapid growth appeared in Asean's LCC network after 2004, when AirAsia began to take advantage of partial deregulation.

But that growth was largely driven by "growing economies and an expanding middle class".

Europe's LCC networks, by comparison, with almost complete deregulation, grew at a similar pace — despite having stagnant or sluggish economies and a static middle class.

"Liberalisation not only meets the needs of the middle class — it fuels it," the report says.

The authors argue that if the region can bring aboutw the Asean Single Aviation Market, the benefits will flow far beyond tourism.

In the US and Europe, LCC networks today are used extensively by small-business travellers and women. Both groups would take to the air more in Asean countries if there were robust deregulation in the region.

The authors write: "It is now time to begin simplifying the processes that are proving burdensome to the successful implementation of the Asean Single Aviation Market plan."

Policymakers in the region who are seeking to create an integrated economic community by the end of 2015 should learn from successful case studies, they say.

The Airports Council International (ACI) estimates that each million passengers flying through an airport generates 1,000 jobs within a community.

Boeing has said Asia-Pacific will need 183,200 more pilots and 230,000 technicians by 2030.

While the roots of liberalisation in Asean date back to the 1990s, the pace of liberalisation began to pick up in earnest in 2004, when a roadmap to integration was published.

Full liberalisation between capital cities went into effect in January 2011.

Asean aspires to full deregulation by 2015, but this is a target that most observers expect to be missed, according to the joint report.

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