Asian aviation faces manpower, infrastructure crunch

THE two greatest challenges that Asian aviation faces are a looming infrastructure crunch and manpower shortage.

Adding to these is the inherent resistance of governments to free up the aviation market, says a seasoned industry insider.

"There are 170 cities in Asia with a population of over one million people, but there are no airports connecting them to the rest of the region," said Raman Narayanan, head of Asean affairs and government relations at AirAsia.

And in South-east Asia, he added that "about 50 per cent of the air traffic in Asean travels via low cost carriers. It is about time governments and regulators in the region recognise this and seriously cater to this segment of the market".

The region's largest low-cost carrier, started by Tony Fernandes and co-investors, has had its fair share of struggles on the infrastructure front. At its home base in Kuala Lumpur, the planned May 2014 completion of the new RM4 billion (S$1.5 billion) low-cost terminal, Kuala Lumpur International Airport 2 (KLIA2), has been delayed.

Meanwhile, the airport crunch at its Indonesian operations has been worsening as more new players enter the business. The result has been a scramble for slots.

"LCCs need simple, functional and utilitarian airports," he said. "We don't need 'Taj Mahals'. Just a 'kopitiam' (coffee shop) airport will do. If governments focus on this they can build five airports in secondary cities for every one massive prestige project they envisage."

The LCC currently operates about 165 single-aisle planes which fly to 92 destinations. Despite not having an air operators certificate (AOC) in Singapore, it operates 90 flights a day in and out of Changi via its Thai and Indonesian units.

The budget carrier could see its fleet grow to about 450 planes by 2024 when its aircraft orders are delivered.

Meanwhile, other operators such as Indonesia's Lion Air, Singapore's Tigerair, Cebu Pacific of the Philippines and Garuda's Citilink are also growing their fleets.

In all, Asean alone has some two dozen LCCs, some operators with just a couple of planes now, with plans for more. AirAsia and Lion Air alone have 1,000 planes on order. LCC penetration ranges from as low as 5 per cent in Laos to as high as 56 per cent in Indonesia.

In Singapore it is 31 per cent, while penetration in Malaysia is 50 per cent.

Mr Raman also sees a major shortfall in aircrew developing across Asia: "Some 190,000 pilots will be needed based on existing Asian aircraft orders over the next decade. The result could be a 30 per cent shortfall in pilots."

His solution: free up cross-border accreditations of pilots and aircrew.

"Asean governments should, identify about 12 to 15 flight academies and accredit them. Provide cross-border licensing. We need mobility in human capital in this region."

And as Asean heads towards Open Skies next year, there will also be a need for harmonisation of routes, regulations and standards.

"We live in a part of the world where we are divided by large bodies of water. Governments need to make it easier and cheaper for people to move about. Let the market pick winners and losers. The money used to subsidise national carriers and dole out losers can be better spent on other priority projects."