Page 11 - AAA JANUARY - FEBRUARY 2017 Online Magazine

FEATURE AIRLINE FORECAST

east carriers have disrupted the traditional doesn’t include aviation - is likely to have politics another significant disruptor is the
traffic flows, the outlook for Asian airlines is a depressive impact on air traffic growth. significant penetration LCCS are making into
still relatively bright says BOC Aviation head “The resulting level of business stimulation the corporate market in Asia.
of Strategy Peter Negline. Speaking at the will be much more limited without the TPP, A recent McKinsey report has revealed
annual CAPA Asia Aviation Summit he said even dampening demand by as much as that LCCs currently account for 29 per cent
he is “very bullish” on India and the market 5-10 percent over the next decade,” cautions of all Asian business travel air spend, making
has, “years of growth ahead”. He also added Harbison. At the CAPA summit Indigo it the most penetrated region in the world.
that North Asia is an “exciting” market and Partners Co-Founder and Managing Partner By comparison, LCCs account for around
represents a significant opportunity for LCCs. William Franke suggested that Trump’s 16 per cent of the US corporate market.
However, he warned that political challenges election may not be as bad as first thought. According to CAPA those numbers need to be
in some Southeast Asian countries may Firstly, he said that the Transport Secretary’s taken in context because there are regional
limit the acceleration of aviation growth. position would need to be filled “By someone differences. It highlights that in Indonesia
Holistically he felt that the fundamental core who understands the issues.’’ Secondly even 63 per cent of business travelers are willing
of the global economy is “quite solid” and that if there were extreme views on transport to fly LCCs compared with only 25 per cent
BOC Aviation is “fairly upbeat by and large”. and aviation, Franke said “The weight of of Singaporeans. The McKinsey report says
Another analyst DVB Bank’s SVP Aviation the office has a moderating effect” as left that Asia has become the epicenter of growth
Research Albert Muntane Casanova said at politicians lean more to the center in order for business travel. Already the region is
the summit that Japan is “really interesting to establish a supporting base to ensure an the world’s largest market, accounting for
for LCCs” due to its large population, high eight-year term. An even more optimistic more than a third of US$1 trillion in annual
tendency to travel, and high GDP per capita. view is taken by Robert Martin MD and CEO spending globally, and growth over the next
He pointed out to delegates that Japan of BOC Aviation. He is optimistic that Trump few years is expected to dwarf that of other
is one of only two mature aviation markets, will focus first on the domestic economy, in markets. By one estimate, between 2014
along with Germany, that have low LCC part because that – not international policy and 2018, business travel spending in Asia
penetration. – gets vote for a re-election. “I think this is is projected to grow four times as fast as in
On the big talking point of Donald Trump’s good for us”, Martin told delegates. “If we North America and more than twice as fast
election Harbison says that aviation has long have a president who wants to grow America, as in Europe. Despite their importance to the
been synonymous with uncertainty. “Brexit net-net that’s a positive.” Martin reminded industry, relatively little is known about Asian
and the election of Donald Trump as the the audience that the US continues to be business travelers (ABT), it adds. McKinsey
next president of the USA has simply added the key driver of global growth. But while says most of the research has focused on
more uncertainty to aviation and globally.’’ that may well be a positive Trump’s views the North American and European markets,
However, he warned that the impact of the on China and its expansion into the South which prompted its survey. Five key markets
seemingly inevitable demise of the Trans China Sea could be quite destabilising on were explored in the study: China, India,
Pacific Partnership (TPP) - even though it air travel. Well away from the impact of Indonesia, Japan, and Singapore. These

Middle East based carriers such
as Qatar Airways have used
their new generation widebody
fleet to open new routes or up
gauge on existing routes
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