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Vision of growing connectivity in the skies for Asean, says S'pore minister

Publication Date : 23-05-2014

 

Soon boarding: more flights, more direct city links and lower fees for both passengers and businesses in Southeast Asia.

With demand for air travel on the up, and an Asean "open skies" pact to kick in at the end of next year, Singapore's Senior Minister of State for Transport Josephine Teo yesterday painted an optimistic picture of an Asean that could soon look like the European Union's single aviation market.

But the vision appears likely to run into turbulence, with Indonesia's Trade Minister Muhammad Lutfi saying that Indonesia is a "stubborn kid" that is hesitant about inking free trade agreements. Indonesia, along with the Philippines, has yet to ratify the aviation pact given the implications for its domestic carriers. The latter is expected to do so.

At a panel discussion on trade barriers at the World Economic Forum yesterday, the two ministers and others spoke at length about the potential - and challenges - standing in the way of regional connectivity.

Teo said that problems exist in the air travel linkages, especially in the form of overcrowded airports.

"Today, if you're very honest about it, there's an overcapacity especially in the low-cost centres. But I think it's a matter of timing... the demand is likely to grow and (we will have) to satisfy the travel preferences of the public and businesses."

She notes, in particular, the burgeoning middle class in Asia. It currently stands at 500 million, and has been estimated to exceed that of the United States and Europe combined by 2030.

Teo's comments come even as industry experts warn of the limitations of Asean's open skies policy given the looming deadline. For one, unlike the EU which allows for unfettered airspace access to member states, the Asean one does not include the right of cabotage - the ability of a foreign airline to connect two domestic points in a country.

Another manifestation of regional connectivity, said Malaysian Trade and Industry Minister Mustapa Mohamed at the panel, is the rise of border towns - countries collaborating in projects and economic activity along shared borders.

Malaysia and Singapore, for instance, are working on the Iskandar complex in Johor. Malaysia is also building facilities on its border with Thailand, a "friendship bridge" with Brunei and air links and ports with the Philippines.

"There has been a change in mindset," said Mustapa. "There was cut-throat competition in the past. Now we are moving towards collaboration."

- See more at: http://www.stasiareport.com/the-big-story/asia-report/philippines/story/vision-growing-connectivity-the-skies-asean-singapore-se#sthash.fl9jYWe5.dpuf


 

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