South East Asian Airport Infrastructure

South East Asia is in the thick of things when it comes to aviation & airline growth. Last decade has seen tremendous growth in aviation sector & the vibrancy will continue for foreseeable future due to a lack of reliable alternatives, strong economic growth & Open skies policy coming in effect from 2015. The low cost carriers have blossomed in the market accounting to nearly half of the capacity. Air Asia & Lion Air are the biggest low cost carriers in the region & the tussle between them to regain the top stop mean a large order book for the OEMs like Boeing & Airbus. Airports feel the strain Southeast Asian carriers have ordered $47 billion worth of aircraft for the coming decade but the deals could be under threat because of the inability of airports to keep pace. So when the region will see tremendous growth in fleet, the infrastructure supporting the growth will need large amount of investment in coming years. Overcapacity remains a concern for airports in the region but especially once in Indonesia. As per a study conducted by Frost& Sullivan, most of the airports in Indonesia were operating much above their installed capacity putting a strain on the operations. Slots are difficult to obtain & planes are forced to circle overhead or idle on the tarmac. Airport congestion makes it harder for carriers to keep their on-time performance and raises operating costs as planes waste fuel waiting to take off or land. Thus it is necessary for the airports to manage the resources that they have efficiently looking at ways to minimize delays through airspace management or invest in new capacity to alleviate the problem. Airspace Management This is an approach wherein airports are investing in new technology, taking the aid of IT systems to streamline the operations at the airports. Some of the aspects being looked into include NextGen program (being evaluated in US airports) to help airports run smoother and avoid long takeoff lines on the runway. Airlines too are playing a role in easing the situation by means of replacing smaller airplanes such as regional jets with larger single-aisle airplanes, helping to ease demand for takeoff and landing slots during peak periods wherever feasible & financial viable.
Aviation Passenger Growth by Year

Airport Investment Plans While the airports are looking at both the options, sustained investment in aviation infrastructure is thus crucial to the continuing growth of commercial aviation.

Airports are planning large capital projects, including new or improved runways, terminal expansions, and entirely new airports. These investments Source - IATA can significantly increase airport capacity, but are substantial, and development times typically extend more than a decade from initial planning to completion of construction. Singapore Changis average annual passenger growth has been 12 percent in each of the past two years, far higher than the average for the past seven years of 8 percent. eg Changi handled as many as 950 aircraft movements on a busiest day (ie every other minute a flt landed or took off). In order to keep up with the

demand, Changi Airport will build a fourth terminal that will boost total capacity to 82 million passengers a year from the current 73 million when it is completed in 2017. At Soekarno-Hatta, a major overhaul is in the works. It introduced a third terminal last year as it looks to boost capacity to 62 million passengers per year by 2014, a substantial jump from the load the clogged airport now handles. It also plans a third runway and fourth terminal that could potentially triple its capacity, measured by aircraft movement, but the plan has been hindered by land acquisition issues that might force authorities to build an entirely new airport elsewhere. Airports in Hanoi; Bangkok; Manila; Siem Reap, Cambodia; and Vientiane, Laos; are making upgrades that will cost at least $1 billion each In sum, the overhaul of infrastructure is necessary to keep up the air travel demand in the region & to support large orders of new aircrafts that will be filled in coming months & years.
----------------------------------------------------------------------------------------------------------------------------- -----------------This article was authored by Sagar Shahane, Consultant, Asia Pacific Aerospace & Defense Practice, Frost & Sullivan. Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participa nts.Our Growth Partnership supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure. For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies? To join our Growth Partnership, please visit http://www.frost.com.