March 04, 2014 00:00
By Karamjit Kaur
The Straits Tim
In a new world set for creation by the end of next year, Singapore Airlines (SIA), Thai Airways and other Asean carriers will fly freely across the region to any airport and as often as they want.
Today, such flights are restricted by government-to-government deals that dictate how often carriers can fly between two points and the number of passengers they can ferry.
Asean’s ultimate goal is a single aviation market. Among other things, this will mean that airlines are no longer prevented from holding a majority share in a carrier in another Asean country. The region’s carriers would then be free to merge across borders.
But the more immediate goal is less ambitious. It involves allowing Asean airlines to fly with fewer restrictions within the region by the end of 2015.
The challenge, of course, is in implementation, and it is here that plans may spiral into a tailspin.
Forged in 2007, Asean’s “open skies” agreement covers five freedoms.
The first two – an airline’s right to fly over foreign airspace without landing and the right to stop in another country for refuelling or maintenance – are already common practice.
The third freedom is when an airline is able to fly from its home country to an airport in another country without the need for prior inter-governmental approval. The fourth is when it flies back home.
The fifth freedom involves an airline flying to an airport in country A and from there to country B before heading back – again without the need for inter-governmental approval.
In its pure form, however, open skies would involve much more than this. For example, an airline would have the right to park its planes and operate domestic flights in another country.
With the 2015 deadline looming, however, not everyone is convinced that Asean’s target for the unrestricted exercise of the third, fourth and fifth freedoms will be met.
Eight Asean member states have ratified the agreement. The Philippines is expected to sign soon, but there is a question mark over whether Indonesia will agree.
Aviation-law academic Alan Tan of the National University of Singapore said: “Since Indonesia constitutes half of Asean’s population, it’s a huge gap. It’s a bit like the European Union doing this without France, Germany and Britain combined.”
So what is preventing Indonesia from inking Asean’s Multilateral Agreement on Air Services and the Multilateral Agreement for Full Liberalisation of Passenger Air Services?
It could be fear that local airlines may not be able to compete against stronger carriers from fellow Asean countries.
As the biggest country within the bloc, Indonesia may also be wary about giving away too much.
Open skies would give SIA, for example, access to tens of airports in Indonesia. But Indonesia’s national carrier Garuda would be able to fly only to Changi Airport, in Singapore.
Still, Asean has made good progress. A significant milestone was reached in 2008 between Singapore and Malaysia when budget carriers were allowed to fly between Singapore and Kuala Lumpur. And Indonesia has also allowed airlines from neighbouring countries to mount more flights to Jakarta and other key cities.
But such liberalisation will be meaningless if the infrastructure cannot cope.
What is the point of lifting air restrictions if passenger terminals are then bursting at the seams? Or air traffic controllers cannot cope with the growing number of flights? Or there are not enough runways to accommodate increased traffic?
In Singapore, Changi Airport’s Terminal 4 will be ready by 2017. By the middle of the next decade, Terminal 5, which will be able to handle up to 50 million passengers a year, will open.
By then, Changi will be able to cope with 135 million passengers a year. A third runway will be operational by the end of this decade.
But not all airports are growing so rapidly. To relieve congestion at Indonesia’s Soekarno-Hatta, Jakarta’s old airport Halim recently re-opened to scheduled flights. But Halim can support only a small amount of traffic.
In Kuala Lumpur, the opening of KLIA2 – Asia’s biggest budget carrier terminal – seems certain to be delayed again after it recently failed fire and safety checks. Currently scheduled for a May opening, the terminal is already more than two years late.
With demand for air travel in Asia-Pacific expected to triple by 2030, industry experts have also warned of massive delays and congestion for travellers if air traffic systems are not upgraded and modernised.
In 2012, Singapore announced plans to spend S$200 million (Bt5.2 billion) in research on air traffic management. The findings will be shared with other countries in the region.
Asean’s vision for a new liberalised air transport framework offers significant benefits for travellers and member states. For this to happen, however, different pieces of the puzzle need to fall in place.
A similar initiative in Africa, which started more than 20 years ago, has yet to take off.
It would be a shame if Asean fails to fulfil its open-skies dream.