Saturday 30 April 2016

ASEAN Open Skies: Sky's the limit for ASEAN airlines flying within bloc

By Karamjit Kaur, Aviation Correspondent, The Straits Times, 29 Apr 2016

ASEAN countries pushing for free skies, to give travellers more flights, lower fares and new destinations, have reached a key milestone.

All 10 member states have ratified a deal allowing airlines that meet safety requirements to fly freely from their home countries to any city within the bloc.

In other words, the airlines from ASEAN countries will be able to make as many flights within the bloc as they want - as long as the airports can support them. The deal takes effect immediately.

Typically, air services are bound by government-to-government deals that stipulate how many flights airlines can operate and with which aircraft size.

But the ASEAN agreement, sealed about four months behind schedule, comes with a caveat from Indonesia. For now, it has agreed to include just five airports in Jakarta, Bali, Surabaya, North Sumatra and South Sulawesi in the deal.

Countries are sometimes reluctant to remove all barriers for fear that their carriers may not be able to compete effectively with foreign airlines, though experts say the ASEAN deal is still a positive step.

Aviation law professor Alan Tan of the National University of Singapore told The Straits Times: "This is great news for travellers... They can look forward to more flights at more competitive prices."

Among the big winners are low-cost carriers like AirAsia, Tigerair and Cebu Pacific, whose operating models are perfectly suited for the region where no two points are more than a few hours apart.

Six in 10 intra-ASEAN flights are already cornered by low-cost carriers and the proportion is expected to increase.

Operationally, though, a significant constraint arises in relation to airport slots as the number of flights and passengers increases.

For example, airports in Jakarta and Manila that have already reached maximum capacity will have to move fast to expand, according to Prof Tan, otherwise unlimited flight capacity is meaningless.

As part of integration, member states are also working towards safer and more secure skies, as well as enhancing traffic management efficiency and capacity.

Operating as a single sky instead of 10 separate air zones will allow for more direct and shorter flights within the region, for example. This will benefit not just travellers but also airlines, which will be able to operate more cost-effectively.

Prof Tan pointed out that ASEAN countries should continue to liberalise.

For example, an airline from one country within ASEAN should be allowed to drop off and collect traffic from a second country on its way to a third - what the industry refers to as "fifth freedom rights".

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