KUALA LUMPUR: The airline industry in Asean needs to be revolutionised, particularly on the regulations of foreign ownership of airlines, as the region lower its barriers to spur economic growth.
The current restriction that prohibits foreign ownership of airlines, or the nationality rule, is leading to capital destruction and under investment in the region’s aviation sector, said AirAsia Group chief executive officer Tan Sri Tony Fernandes.
He said other industries, such as bank and construction, are able to fully own its shares in its foreign companies or co-own the projects in other countries with their respective partners.
However, airlines are still lagging behind in terms of foreign ownership and investment due to out-dated regulation, Fernandes added.
He said even some airports in the world are 100 per cent-owned by foreign companies. For example, Heathrow Airport is owned by FGP TopCo Ltd, an international consortium that is largely owned by Spain-based Ferrovial Group.
Malaysia Airports Holdings Bhd (MAHB) also fully owned the Istanbul Sabiha Gokcen International Airport in Turkey.
“Ownership regulations are far outdated and its time to relook at it because other industries are moving forward and aviation is a big contributor (to GDP) and if companies such as ours (AirAsia) wanted to invest more capital (in its affiliate carriers outside Malaysia), it will prevent us from doing it due to the out-dated regulations,” said Fernandes at a press conference at the World Economic Forum (WEF) on Asean, here, yesterday.
Meanwhile, WEF member of the managing board and head of the centre for regional strategies, Philipp Rösler said the aviation industry represents 10 per cent of the global gross domestic product (GDP) while in Asean, the sector represents 12 per cent of the region’s economy.
He said the enormous economic contribution the aviation sector creates has led to huge job opportunities for Asean people.