Page 13 - AAA SEPTEMBER - OCTOBER 2015 Online Magazine

INTERVIEW AAPA

Despite slower growth in some of the Asian economies, air travel remains
popular and affordable for growing numbers of middle income consumers

industry in Indonesia has experienced do you expect for the current air navigation services, in line with the
rapid growth with the market exceeding 90 year and in the near term? projected growth in travel demand.
million passengers per year and provides hERDMAN: The year 2014 saw Asia
essential connectivity for a country with Pacific airlines achieving continued AAA: The ASEAN Open Skies policy
250 million population spread across growth in passenger numbers and a long has come into effect on January
a vast archipelago.The Indonesian awaited recovery in the air cargo market. 1, 2015 . Do you see any marked
authorities and aviation industry have Nevertheless, market conditions remained change with this new policy?
made significant strides in implementing highly competitive and airline profit hERDMAN: The ASEAN Open Skies policy
modern safety management systems. margins remain under severe pressure. is the latest milestone in a series of
However, the rate of improvement in Results were mixed, but overall Asia steps taken in recent years towards more
safety performance has not kept pace Pacific airlines reported only a breakeven liberalised air services across the region.
with the rapid growth of the industry. As a result for the year 2014. So far in 2015, It has led to the proliferation of new
result, Indonesia continues to experience we have seen continued robust growth in services offering improved connectivity
a number of tragic accidents. AAPA has travel demand on both short and long haul and choice of products and services.
called for greater efforts, including the routes. Consumers are benefiting from ASEAN has also negotiated liberalised
need to strengthen regulatory oversight the sharp fall in the price of oil which has agreements with other countries within
in accordance with established global kept airfares very affordable. the region and further afield.
standards set by the International Civil
Aviation Organisation (ICAO). AAA: What are the limiting factors to AAA: Also, do you think the low cost
growth in aviation and are they specific carriers eating into market share of full
AAA: If I remember correctly, after the to the region, or more reflective service carriers in the Asia Pacific?
crash of an AirAsia flight in January, a general development pattern hERDMAN: The Asia Pacific region has
Indonesia government had promised to seen in more mature markets? seen considerable experimentation with a
implement a safety ranking for airlines hERDMAN: Despite slower growth in variety of business models, including the
operating in the country and impose some of the Asian economies, air travel rapid growth of low cost carriers. Many
minimum fleet size of 10 airplanes. remains popular and affordable for growing full service carriers have established
Are they being implemented? numbers of middle income consumers. The subsidiary airlines offering such services.
hERDMAN: The Indonesian government outlook for the future remains bright with Asia At the same time, full service carriers
is implementing a number of measures Pacific travel demand projected to grow at 5 to continue to capture the largest share of
including minimum fleet size and capital 6% annually over the next two decades. the industry revenues, and are making
requirements for airlines with the aim of continuous investments in new premium
encouraging consolidation and facilitating AAA: Are the so called restrictive products and services, particularly on
regulatory oversight. government policies acting as a hurdle in long haul routes. Ultimately, it is up to
the recovery path of the airline industry? consumers to decide what kinds of services
AAA: How is the emergency-response hERDMAN: Aviation is a highly offer the best value to meet their needs.
conference organised by AAPA helping regulated industry, not least because of
in addressing safety concerns? the fundamental importance of effective AAA: Last but not the least,
hERDMAN: AAPA has organised a series regulatory oversight regarding safety what about cargo?
of conferences focusing on emergency and security of the traveling public. hERDMAN: Air cargo provides essential
response planning for the aviation industry. However, we sometimes question support for the global economy,
These events bring together experts from whether other forms of government transporting more than USD6 trillion worth
airlines, regulators, emergency service regulations are necessary and believe of goods, representing 35% by value of total
providers and humanitarian agencies to strongly that a fair balance needs to be international trade. Asia Pacific airlines
share expertise and best practices when struck. Aviation is a highly competitive are major players in the cargo industry,
responding to accidents, or other events market place and consumers benefit from carrying 38% of global air cargo traffic
causing major disruption such as severe such competition and ongoing customer measured in FTK terms. The air cargo
weather and health pandemics. service innovation. Governments market has experienced difficult operating
do have an important role to play in conditions since the global financial crisis
AAA: Financially, how was 2014 coordinating the development of aviation but volumes picked up in 2014 and are
for airlines in the region and what infrastructure, including airports and relatively stable to-date in 2015.
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