October 7, 2024
BANGKOK – The two-day event, which concluded on Thursday (3 October), showcased how this expansion is expected to create numerous investment opportunities across the aviation industry, from infrastructure to technology to services. did.
The summit, which was attended by more than 300 public and private stakeholders from Asia and Europe, highlighted the region’s aviation sector as a great opportunity for global investors, especially ASEAN countries.
investment magnet
The summit highlighted how the region’s robust growth in the aviation industry is creating numerous investment opportunities across the value chain, from aircraft manufacturing to airport infrastructure and support services.
Benoît de Saint-Exupéry, Airbus’ vice president of commercial aircraft sales, highlighted the region’s investment potential.
“Aviation is a growth sector,” he said, predicting that the global aircraft fleet will more than double to 48,000 by 2045, with Asia-Pacific leading the way in this expansion.
“Our aircraft have provided wings to the economic growth and development of this country,” de Saint-Exupéry said, citing the Philippines as an example of the region’s potential.
He highlighted how new infrastructure, such as Manila’s new airport, will serve as a “key enabler of this growth” that will attract further investment and economic activity.
Economic impact and growth forecast
Yuri Thompson, Southeast Asia Area Manager for the International Air Transport Association (IATA), presented compelling data that supports the region’s investment case.
“There is no dull moment in the aviation industry,” she said, highlighting the significant momentum of the post-pandemic recovery.
“The average recovery rate in the ASEAN region has reached over 90%, with Vietnam being the only country with a full recovery in both domestic and international travel,” Thompson reported. This rapid recovery shows investors the region’s resilience and growth potential.
While warning that a full recovery could last until 2025, Thompson emphasized long-term investment opportunities.
“For Asia Pacific, we forecast a modest profit of USD 2.2 billion in 2024,” she explained, suggesting there is significant scope for growth and investment returns as the market matures.
infrastructure development opportunities
The summit identified infrastructure development as a key area for foreign investment. Passenger traffic is expected to grow by well over 5% per year in many ASEAN countries, requiring significant investment in airports, maintenance facilities and supporting infrastructure.
Several airport development projects are currently underway in the ASEAN region.
U-Tapao Airport is being transformed into a major international gateway as part of Thailand’s Eastern Economic Corridor (EEC) initiative. The initiative aims to promote high-tech industry, logistics and tourism by establishing new industrial zones and upgrading infrastructure.
In Vietnam, the Long Thanh International Airport project aims to relieve congestion at Tan Son Nhat International Airport, with the new facility capable of accommodating 100 million passengers a year.
Meanwhile, Indonesia’s New Capital Project aims to move the capital from Jakarta to East Kalimantan and provide government buildings, residential areas, and supporting infrastructure.
Additionally, Malaysia’s Malacca Gateway project includes a deep-sea port, an international cruise terminal, and a maritime industrial park, while the Philippines is expanding its Clark International Airport to accommodate more international flights and passengers; We are accelerating the upgrade of Aquino International Airport. Public-Private Partnership Airport (NAIA).
The development of these airlines will require FDI support for infrastructure and facilities, but Thompson advocated viewing digitalization as an investment opportunity.
“Digitalization allows us to improve the passenger experience while increasing operational efficiency without the need for new terminals or airports,” he said, citing the potential benefits from technology investment in this area. Ta.
Business aviation: a growing niche market for investors
Kurt Edwards, Executive Director of the International Business Aviation Council, highlighted the potential for investment in business aviation, particularly in the ASEAN Island countries.
“One size does not fit all. It is essential that global standards reflect the unique circumstances of small aircraft operators and companies,” said Edwards, highlighting the diverse investment opportunities in this sector. did.
The Philippines has 19% of Southeast Asia’s business aircraft fleet and represents the growth of the business aviation market in ASEAN.
“Business aviation has consistently been a leader in efficiency and emissions reduction efforts, long before it became a mainstream topic,” Edwards noted, adding that there is a strong focus on sustainable aviation technology. It suggested a potential investment opportunity.
The three experts also agreed that the industry’s expansion presents significant opportunities for workforce development investments.
Projections suggest that Asia-Pacific will need nearly 1 million new skilled professionals, including pilots, technicians and flight attendants, over the next 20 years.
“We must focus on nurturing and nurturing the talent that will lead our industry into the future,” Mr. de Saint-Exupéry stressed, highlighting the potential benefits for investors in aviation training and education facilities.
Sustainability: The next investment frontier
Sustainability efforts in the aviation sector are creating new investment opportunities, even though the sector accounts for only 2-3% of global emissions.
“We have a duty to ensure that future generations can experience the joy of travel,” de Saint-Exupéry asserted, adding, “Every aircraft we replace today is “It makes an immediate contribution to the sustainability goals we all share.”
Sustainability-focused initiatives, such as investing in sustainable aviation fuel (SAF) and modern fuel-efficient aircraft, present significant opportunities for environmentally conscious investors.
Outlook for investors
The investment outlook remains very positive as Asia Pacific’s aviation industry seeks to recover post-pandemic and addresses various challenges. The consensus among Summit participants was clear that, although obstacles remain, the region’s aviation industry offers attractive opportunities for foreign direct investment.
However, disparities in per capita GDP may make it difficult for Asian markets to pass on higher costs to consumers, discouraging investment and potentially inhibiting growth.
Mr. Thompson and Mr. Edwards emphasized the importance of making smart investments in infrastructure and industry to ensure long-term growth while remaining affordable for consumers.
They agreed with other key speakers that it is important to maintain this balance, as increases in operating costs must not exceed the spending capacity of local price-sensitive markets.
Furthermore, it was suggested that government policies be clarified and adjusted to foster a more favorable investment environment in order to encourage domestic and foreign investments necessary for the development of ASEAN’s aviation industry.
Success will depend on the collaborative efforts of governments, airports and industry stakeholders to make this growth smart and sustainable. Mr Thompson concluded that “with great power comes great responsibility”, suggesting that responsible investment in this sector can bring economic benefits and contribute to regional economic development.
