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Published on July 9, 2007

In the aviation industry, Asia is now the world's fastest-growing region, and predictions for the not-too-distant future are mind-boggling. China will soon be challenging the US as the world's largest aviation market, and India is facing huge challenges in the effort to keep up. Suchat Sritama surveys an aviation boom that will fill the skies of Asia while creating monumental headaches on the ground.

In the five years from 2000, China experienced extraordinary growth in its aviation industry, of about 15 per cent per year, and the number of aircraft in the country grew at about the same pace.

It is now ranked number one in Asia, followed by India and Japan.

However, with no end in sight to the region's spiralling hunger for tourism and air transportation, the attendant strains of providing infrastructure in densely populated countries, to say nothing of human resources, are adding up to a future of unprecedented problems.

After the recent years of booming aviation, China now has 10,000 pilots for 998 aircraft.

"There's a severe shortage of pilots," says Zhang Hexiang, head of the Institute of Economy and Management Research in China's Aviation Industry Development Research Centre. So in the coming five years China plans to recruit 2,000 pilots every year to cope with the arrival of new aircraft as well as pilot retirement.

China is constructing or extending 142 airports. The number of airports in the country is expected to reach 200 by 2010 and 250 by 2020. By 2025 it is estimated that China will need 3,110 new aircraft, including 2,232 large and medium-sized planes. (see graphic 1.)

China's domestic market has 1,068 air routes serving 140 cities, while its international services fly 268 air routes to 91 cities in 42 countries.

Driving the expansion of China's aviation industry is the country's robust gross domestic product, which has grown at an average annual rate of 8 per cent over the past 10 years. Economic prosperity brings demand for both domestic and international travel, and when huge growth in demand for air-cargo services is added to the equation, the capacity of China's airports will have to double by 2020.

Zhang, who attended "Asia Forum 2007: The Future of Aviation" in Bangkok, says soaring demand is also spawning many new airlines, among them OK Air, China Express, Shanghai International Transport, Jasmine Airlines, Great Wall Airlines, Hinhau Express and Ningbo Pan Asia. Many new freight airlines are also being formed.

"In terms of scale, technology and products, China will become the strongest player in the Asian-Pacific market, and by 2020 it is expected to be competing with the US and European countries," she says.

It seems the skies have no limit. As Asia is now the centre of the world's economic growth, the numbers of passengers and air-cargo shipments in the region are expected to rise in line with growing average incomes. Asia Forum was told that air cargo within the region is expected to expand by 8.4 per cent per year between now and 2021, while air cargo growth on Asia-North America and Asia-Europe routes will grow by 7.5 per cent and 7 per cent per year respectively.

While it is predicted that by 2020 China will be the second largest aviation market in the world, after the US, it will also by then be the world's largest economy and a clear leader of the Asian aviation industry. Yet not far behind it in second place, and currently growing at twice China's hectic pace, is India.

World Tourism Organisation secretary-general Francesco Frangialli says all parts of the world made gains in international tourism arrivals in 2006. Asia-Pacific showed the strongest growth at 7.8 per cent from a large base, well above the world's average increase of 4.9 per cent.

"Among the notable elements of 2006 we can cite the performance of India, which with growth of 13 per cent did twice as well as China at 6 per cent. However, India had 4.4 million arrivals while China had 49.6 million. China is now very close to the United States, which had 51.1 million arrivals, and, after having overtaken Italy as the fourth-ranked world destination in terms of arrivals in 2004, it should move up to third place this year or next year at the latest," Frangialli says.

India's director-general of Civil Aviation Kana Gohain says he has witnessed tremendous growth in the past couple of years.

"We are rebuilding and developing our airports. We know a growing number of people are flying and the number of passengers will increase in coming years. So the challenge for us now is to provide world-class infrastructure," he says, while adding that infrastructure at, and access to, airports is still a problem in India.

The vice president and head of strategic planning for Delhi International Airport Company, Pradeep Panicker, says there is a great demand for new airport infrastructure in his country. India's economy is growing at more than 9 per cent per year, there is a growing middle class with high purchasing power, and Indians are buying as they have never done before.

However, there is insufficient capacity to support the demands being made of the country's aviation industry, and "there is a long way to go" before it can catch up to the leaders. Large-scale financing is needed to develop airports, to provide new infrastructure and to enhance the efficiency of existing infrastructure. (see Graphic 2.)

In the "catch-up" process, Panicker says, India has to deal with official delays, low international ratings, poor access to airports, lack of investment, the financial health of airlines and underdeveloped commercial revenue sources.

He says plans are under way for a high-speed rail link from New Delhi city centre to the airport, to be completed by 2010. A new terminal and a new runway will also be constructed at the capital's airport within three years to accommodate an estimated 30 million passengers per year. Last year the airport handled 20.44 million passengers, a 26-per-cent rise over the previous year. By 2020 the number of air passengers in New Delhi alone is expected to explode to 83 million.

Amid the extraordinary aviation boom throughout Asia-Pacific, many countries, including Thailand, aspire to become aviation hubs.

With huge airport crowds straining resources throughout the region, achieving hub status will clearly depend on how committed countries are to investing in new infrastructure and how much funding they have in their pockets.