The ASEAN Open Skies Policy, also often called the ASEAN Single Aviation Market (ASEAN-SAM), goals to extend regional and national connectivity, integrate production networks and strengthen regional trade by enabling airlines from all ten ASEAN member states to fly freely throughout the region through the liberalisation of air services inside a single, unified air transport market.
While it may well be argued that it just isn’t a very ‘single’, fully liberalised market in comparison with what the European Union has achieved, it does offer quite a few advantages to the aviation sector and passengers in the shape of competitive prices and greater selection.
“Airlines can launch as many international flights as they want if the market allows it,” says Alan Tan, a professor of aviation law on the National University of Singapore. Reuters Agency“Travellers can therefore count on more flights at more competitive prices.”
The explosion of low-cost airlines
The Southeast Asian region has also seen a rapid growth in low-cost airlines over the past decade, with Malaysian AirAsia, Indonesian Lion Air and Philippine Cebu Pacific the dominant open-skies carriers.
“We are definitely the biggest low-cost carrier in Asia immediately. We stretch from India to Japan and we’re the one airline that has such a broad reach,” says the 53-year-old CEO, known worldwide as AirAsia co-founder Tony Fernandez Independent AirAsia transformed a struggling Malaysia-based national carrier into Asia’s largest airline group with operations in five countries.
He adds: “We want ASEAN to change into a single market, so we should always start behaving like one market. We are slowly achieving this, and ASEAN Open Skies is finally becoming a reality.”
Meanwhile, in only five years, Vietnam’s first private low-cost airline, Vietjet Air, just launched its initial public offering (IPO) in February 2017. It was recorded as the biggest airline in Vietnam IPO.
Its CEO, Nguyen Thi Phuong Thao, also became Southeast Asia’s only female billionaire, with a net value estimated at $1.7 billion, based on data from Forbes.
Growing tourism and international trade sector
As visa restrictions ease and convenient eVisa services are introduced, it would change into easier for governments to persuade airlines to fly to secondary destinations.
“More than ever, airports and government travel agencies are key players. They have the funds and can go to airlines and offer incentives to encourage airlines to create new routes,” says Jameson Wong, Asia Pacific business development director at ForwardKeys, Mekong Tourism Forum in Luang Prabang earlier this month.
Airports are also struggling to deal with the brand new influx of cross-border travellers, while second- and tertiary destinations are also benefiting from improved air connections.
According to the Mekong Aviation Snapshot Trend Report Mekong Aviation Snapshot trend report The fastest growing airports when it comes to seat capability between July 2015 and July 2016 were: U-Tapao, Pattaya, Thailand (214.2% increase); Phu Quoc, Vietnam (66.4%); Haiphong, Vietnam (60.4%); Nha Trang, Vietnam (48.8%); and Luang Prabang, Lao People’s Democratic Republic (38.9%).
The region’s air transport sector can be expected to learn from cooperation with ASEAN nations, which is predicted to assist increase air freight volumes by 50 percent this 12 months.
Boyke P. Soebroto, Head of Cargo at Indonesian National Air Carriers Association (INACA), says: Jakarta Post “Before the establishment of ASEAN Open Skies, also known as the ASEAN Single Aviation Market (ASEAN-SAM), Indonesian cargo flights had to stop over in countries like Singapore as hubs on their way to their final destination.”
“This is an opportunity for Indonesian air cargo service providers to enter ASEAN industrial hubs, both for import and export.”
He adds: “For example, tuna producers can export tuna from Manado to Manila, which is close to Japan, making it cheaper to sell the product.”
Thanks to the advance of the aviation sector, International Air Transport Association (IATA) estimates that ASEAN countries could add almost 25 million jobs and $298 billion to the region’s GDP by 2035 in the event that they invested in aviation. This is up from 11.6 million jobs and $144.4 billion to GDP in 2014.
