Straits Times, 23.02.04
Air travel in Asia set for major take-off
And countries whose governments expose their national airlines to competition will triumph, says SM Lee
By Rebecca Lee
http://straitstimes.asia1.com.sg/top...36554,00.html?
AIR travel in Asia will soon take off on a massive scale and yesterday Senior Minister Lee Kuan Yew spelt out how he saw the aviation scene changing - and who will triumph.
They will be those countries whose governments liberally exchange air traffic rights and expose their national airlines to competition.
SM Lee, who has kept a long and close interest in the aviation industry, was speaking at an industry event attended by 150 captains of the business.
And just what can Singapore do?
His answer, in a nutshell, was that it could not afford to sit idly and both Changi Airport and Singapore Airlines (SIA) must adapt quickly to the changing landscape.
'At stake is not just SIA, but Singapore's future as an air hub,' he said, speaking at the opening of the International Air Transport Association (Iata)/Asian Aerospace Aviation Summit.
Mr Lee's comments come against the backdrop of an industry that has undergone tumultuous changes in the past few years with traditional carriers having to compete with upstart low-cost airlines, and the resulting consolidation.
SM Lee noted that competition for Singapore will be in quality of service, adequacy of networks in terms of frequencies and destinations offered.
'Changi must maintain and strengthen its connectivity,' he said.
SIA will have to meet competition from low-cost carriers as well as the traditional full-service airlines that have remade themselves, he said.
The proliferation of low-cost carriers in America and Europe - and now starting in Asia - has made travelling by air as common as taking a bus. Today, about 45 per cent of the more than 700 million international tourists and 40 per cent of the world's manufactured exports travel by air. Civil aviation also created at least six million jobs worldwide, Mr Lee noted.
In Singapore, aviation had also been key in developing the country into a global economic hub and cosmopolitan city, he said.
Iata director-general Giovanni Bisignani last night also highlighted the important role aviation played as a 'backbone to the tourist industry' and 'the No. 1 employer in the world', even though airlines lost more than US$30 billion (S$50 billion) in the past three years.
'Many might think there is not much to celebrate, but I strongly disagree,' he said.
SM Lee was equally optimistic about the industry, especially in Asia-Pacific, which will have the highest growth of all regions.
Having seen the potential spin-offs in trade, tourism and investment flows, governments in Asia are also beginning to liberalise their air transport regimes, he said.
Sharing SM Lee's optimism on Asia was Iata spokesman Tony Concil: 'Asia is a growing market for aviation - and that includes full-service network carriers and low-cost carriers.'