KUALA LUMPUR: The centre of gravity for global airline sector is inexorably shifting towards eastwards, particularly over South Asia by 2036, according to the International Air Transport Association (IATA).
Its head of Policy Analysis, James Wiltshire said the growth in South Asia market has been attracting more commercial airlines to offer more services.
He said North Atlantic market has been historically been at the heart of global aviation. However, countries in the region would have to work harder to continue growing.
He ruled that there would be competition to make the most of the enormous potential in Asia for markets that want to connect to this emerging region.
“Many of the markets where connectivity has grown fastest unsurprisingly are in Asia. Aviation is a major enabler of economic activity and social cohesion.
“Air connectivity drives economic and social benefits. Air transport supports over 65.5 million jobs and contributes to the creation of more than US$2.7 trillion in gross domestic product,” he said at a briefing during IATA Global Media Day 2018, last week.
He added that air transport enables tourism, international trade, encourages inward investment, innovation, education and productivity, while promoting social cohesion.
“Connectivity is defined as the extent to which a country is integrated into the global air transport network including number of flights, seats and destinations.
IATA chief economist Brian Pearce said currently the centre gravity of the commercial airlines industry is in the Gulf region.
However, in 20 years time, he said the centre of gravity will be heading to the East Asia due to the rising geographical advantage in the region.
“In the Middle East, we foresee that there are challenges including conflict and business competitions,” he said.
Wiltshire revealed that a country which has the right framework in place such as sufficient airport infrastructure (on the ground and in the air), cost competitiveness, and smart regulations as well as borders processes would create stronger connectivity growth.
“The cost of air travel is a key driver of passenger demand. Excessive charges and burdensome taxes add to the cost of travel and inhibit connectivity.
“Regulation should only be implemented where necessary and proportionate, while visas not only add complexity but also cost to anyone who has applied for a visa,” he said.
He said competitive regulatory and operating environment are crucial for air passenger demand, citing that the air transport can act as an enabler of the global economy.
“Aviation is sensitive to policies that either support or undermine growth. Governments should put in place policy frameworks that facilitate air transport to stimulate air connectivity.
“Encouraging air connectivity will generate high quality jobs and economy activity,” he said, adding that governments are encouraged to view air transport as an economic opportunity.
