With impact on the COVID-19 pandemic subsiding, Southeast Asian countries have re-opened their international borders for, setting off a boom in the aviation sector. Airline companies across Southeast Asia reported the beginnings of a rebound in bookings with the easing of travel restrictions. Governments across the region are now aiming to attract higher revenue-generating international tourism along with domestic tourism.
According to industry estimates, international bookings to Southeast Asia reached 38 per cent of pre-pandemic levels by late March 2022. They were reported to be less than 10 per cent of 2019 levels during January 2022. To improve air connectivity between the 10 countries of the Association of Southeast Asian Nations (ASEAN) and the 27 member states of the European Union (EU), ASEAN and the EU have signed the first region-to-region aviation agreement named the ASEAN-EU Comprehensive Air Transport Agreement (AECATA).
This agreement will set the foundation for closer cooperation between ASEAN and the EU in areas such as aviation safety, air traffic management, consumer protection, and environmental and social matters. The AECATA was signed after eight rounds of negotiations that began in October 2016. This agreement is also important as the EU is among ASEAN’s largest sources of investment and trading partners. Southeast Asian countries are taking various steps to expand the aviation sector.
A look at some of the key developments and initiatives in the aviation sector across Southeast Asia…
Malaysia
Malaysia is working towards airport development and improving maintenance, repair and overhaul facilities at, and connectivity facilities to, airports. Malaysia opened up its international border in April 2022, leading to a rise in air traffic. Malaysia Airports Holdings Bhd (MAHB) announced that passenger traffic in 2022 exceeded 7 million, making it the highest recorded since 2019. Growth has been equal in both international and domestic passenger movements. In May 2022, passenger footfalls exceeded 1 million across all airports in the country. As airlines are increasing flight frequency, passenger traffic numbers are expected to increase in the coming months.
MAHB has also announced plans to deploy an airport collaborative decision-making (A-CDM) system at the Kuala Lumpur International Airport. The new system is expected to improve operational efficiency. The A-CDM will unify airport, air traffic control, airline, and ground handling operations under a single platform. It will also enhance cooperative decision-making and shared situational awareness while optimising information exchange. The system will improve coordination among airport stakeholders, allowing decisions to be made more accurately.
The seven stakeholders are the Civil Aviation Authority of Malaysia (CAAM), AeroDarat, AirAsia, Malaysia Airlines, Batik Air, Pos Aviation and Ground Team Red. Currently, 18 airports in the Asia-Pacific region have already implemented A-CDM, while 23 are implementing the system. Turkey-based Haritaevi Aviation Engineering has announced plans to boost digital transformation at 21 airports across Malaysia. The company will provide electronic terrain and obstacle data, obstacle data analysis, and airport mapping database services for selected airports as well as the Airport Surface Routing Network for six airports.
Additionally, Haritaevi will use a mixed method based on terrestrial integration and photogrammetric satellites. All services to be provided will comply with the European Union Aviation Safety Agency, the International Civil Aviation Organization standards and International Organization Standards.
Singapore
The aviation industry is a significant contributor to the Singapore economy. Singapore relaxed its border restrictions in April 2022, leading to the strong recovery of the aviation industry. This bright outlook is reflected in Singapore Airlines’ latest operating statistics for May 2022, when it reportedly carried more than 1.7 million passengers. This is an astonishing increase of around 1,326 per cent compared with a year ago and 17.4 per cent higher than in April 2022.
However, Singapore’s aviation sector still faces a manpower shortage, despite 4,000 new recruits joining in the first half of 2022. The aviation sector in the country employs around 29,000 professionals, including the new recruits. The authorities are working towards enhancing the knowledge of the new recruits in the sector and improving their skills. This is critical for operational efficiency as well as for safety. Singapore is taking various measures to develop the aviation sector in the country.
The Competition and Consumer Commission of Singapore has granted conditional approval for proposed commercial cooperation between Singapore Airlines Limited and Malaysia Airlines Berhad for post-COVID recovery. The aim is to increase traffic between Singapore and Malaysia and certain agreed markets like Europe. This cooperation will include coordination on network planning and scheduling, pricing and inventory management and distribution, joint sales and marketing, and revenue sharing, among others. After a two-year hiatus due to COVID-19 restrictions in the country, the Ministry of Transport of Singapore recently announced that work will resume on the construction of Changi Airport Terminal 5 (T5).
The design of the terminal will be updated and refined, and construction is scheduled to commence by 2024. The terminal is expected to be opened to passenger traffic by 2030. There will be a network of tunnels to link the main Changi T5 terminal to existing terminals as well as two satellite tunnels to improve airside connectivity and passenger transit. The upcoming terminal will also add over 100 departure gates to the airport. It will be built on a 1,080 hectare greenfield site, adjacent to an upcoming third runway. Once operational, the terminal will be able to handle passenger footfalls of around 50 million annually.
In another development, Singapore’s Seletar Airport is set to become a hub for electric vertical take-off and landing vehicles, also known as flying taxis, by 2024. This will make it the second such facility in the country after Changi Airport. In line with this, agreements have been signed with Skyports Limited and Volocopter GmbH to convert the existing airfield into a vertiport for future operations. The flying vehicles are expected to be used as airport shuttles, for tourist flights or intercity travel and will be able to cover a distance of about 250 km on a single charge. Fares for passengers are expected to start at about 40 per cent of the cost of a helicopter, which will eventually drop to around the price of a premium taxi within five to six years.
Vietnam
According to the Civil Aviation Administration of Vietnam, air passengers numbered 23.3 million in the first half of 2022, recording an increase of around 74.2 per cent year on year (YoY). The domestic market recorded nearly 20.8 million passengers in this period, surging 60 per cent YoY. Moreover, around 651,000 tonnes of commodities were transported via air routes in the Southeast Asian country during the period, up 6.8 per cent from the same period last year.
The Vietnamese administration is taking many steps to help the aviation sector recover from the COVIID-19 pandemic. The Vietnamese government is planning to add a third terminal to Ho Chi Minh City’s Tan Son Nhat International Airport to expand its passenger capacity by about 80 per cent by 2024. The construction of the terminal is expected to commence in September 2022.The $470 million project was initially approved in 2020 but issues in land acquisition as well as COVID-19-related restrictions in Vietnam delayed the work. The airport currently has two terminals with a capacity to accommodate around 25 million people per year. However, the airport has been operating over capacity with passenger traffic reaching 40 million in 2019. Once operational, the third terminal will increase its total capacity to 45 million passengers annually.
In another development, the SOVICO Group, Vietjet and Changi Airports International have signed a $1.5 billion partnership agreement to co-develop the supply of aviation services in Vietnam. The partners will undertake research and development of green, sustainable and smart infrastructure projects in the country. The partnership is also expected to raise management standards to optimise airport related operations, promote economic development and boost connectivity in Vietnam and in the region. The partnership aligns with the Southeast Asian region’s goal to increase opportunities in the field of sustainable aviation.
Indonesia
The Indonesian government is working on developing the country’s aviation sector. It aims to have an environmentally friendly civil aviation sector. The International Air Transport Association has said that with 251 airports, Indonesia will become the world’s fourth-largest air transportation market by 2036. The development and recovery of the aviation sector has become a priority for the government, with special focus on sustainability and the environment.
PT Pertamina, Indonesia’s state-owned oil and gas corporation, is developing a palm oil-based aircraft fuel to reduce carbon emissions in the country’s aviation sector. The product named Bioavtur J2.4 is being produced at the Pertamina International Refinery in Central Java. After a thorough development process, Bioavtur J2.4 has been proven to deliver performance comparable to fossil-based aviation turbine fuel. Bioavtur’s performance has registered only a 0.2 to 0.6 per cent difference from that of fossil avtur fuel. Pertamina’s Bioavtur J2.4 is being developed in accordance with the Ministry of Energy and Mineral Resources’ clean energy road map, which calls for a biofuel mix of up to 5 per cent by 2025, including for air transportation.
The next stage in the development process is to conduct a flight test based on the results of the statistical test to check if the technical and safety aspects of using bioavtur can be implemented.
The Philippines
Like other Southeast Asian countries, the Philippines is also working towards the improvement and recovery of the aviation sector. The Government of Lamitan has announced plans to develop a new airport in the Philippines’ city. According to the latest updates, the land acquisition process is already under way for the project, with sites being identified by the Civil Aviation Authority of the Philippines (CAAP). About 100 hectares of land is needed for the airport and 30 per cent of the acquisition has been completed.
About PHP 30 million has been allocated from the city budget while the provincial government of Basilan has allocated another PHP 20 million for the land acquisition. In another development, CAAP is inviting interested parties to submit their bids for initial works to expand four domestic airports in the country. The bids are being sought for survey services for the expansion of Roxas Airport in Capiz, Vigan Airport in Ilocos Sur, and Virac Airport in Catanduanes.
The fourth contract will be awarded to appraise land for the Baler Airport expansion. These projects are a part of the Government of Philippines’ BuildBuild-Build programme. The projects will focus on improving passenger and aircraft carrying capacity at the four airports as passenger traffic recovers in the Philippines after the COVID-19-related slowdown.
Thailand
The aviation industry in Thailand is recovering from the impact of the Covid-19 pandemic and airports in Thailand are expected to see a full recovery in passenger traffic to pre-pandemic levels by the end of 2024, according to estimates by various aviation agencies. In a recent development, Betong airport in Yala has commenced commercial operations after receiving its operating licence from the Civil Aviation Authority of Thailand. The new airport will be owned and operated by the Department of Airports, Thailand.
The airport is expected to provide a safe and reliable alternative to road travel through the region’s mountainous terrain. The airport will be constructed on 147 hectares of land and is expected to handle up to 300 passengers per hour and 800,000 annually. The airport has a single 1,800 metre runway that can accommodate small, 80-seat turboprops including the ATR-72 and Bombardier Q-400. Its passenger terminal is 7,000 square metres in size.
The new facility is also expected to double Betong’s daily tourist arrivals, which is currently around 2,000 daily. In another development, Airports of Thailand (AoT) has announced plans to upgrade airports in Thailand including the Krabi, Buri Ram and Udon Thani airports to regional hubs to boost the country’s edge in international aviation. Operations at the three airports are currently supervised by the Department of Airports, Thailand. Krabi and Udon Thani airports are expected to be transferred to AoT by the end of August 2022, with the transfer of Buri Ram airport scheduled for September 2022.
