As the Singapore Airshow kicks off this week, the Financial Times’ have released a special report focusing on the Asian Aerospace market.
One of the themes of the report is whether the reduction in earnings of APAC carriers over the last few years may have hit the optimism of the region as the main emerging market for aviation. (Forecasts show that around 11,000 aircraft will be required by 2032).
Despite lower economic growth amongst some APAC countries and a decrease in revenues from the air cargo market reducing airline profits, the rise of the middle classes and greater disposable income in the region means demand is set to continue – and diversify. The FT’s China Confidential report lists 12 Dream destinations from Chinese tourists – only 1 of which is in the APAC region (Australia).
As part of the Twitter Q & A hosted by the FT, ADS asked about the link between this international shift in destination, and the choice of platform for APAC airlines…:
Given the shift in demand from regional to international air travel in China, do S-Aisle or W-Body aircraft offer best option for APAC carriers?
The responses reveal why aircraft orders are so wide ranging in the region, and why, despite more international travel focus, APAC airlines may see their growth constrained.
“China has big city pairs, so the focus will be on the high density widebody market. However, more narrowbodies could exploit smaller city pairs, especially as these smaller cities are expanding with new airport capacity. In addition, despite international travel as an aspiration, the rate of long haul growth may be constrained by slot availability at destination airports”
The question remaining therefore, is not whether new aircraft will actually be required (the internal demand and external ambition will continue to grow) but where will APAC airlines seek to position themselves in order to take financial advantage of this growth in demand?
Whatever their conclusions, airlines will continue to seek out greater ways to improve their financial performance – and investing in new aircraft with lower fuel/ maintenance costs is a vital way to achieve this.