Market Trends of South-East Asia Civil Aviation Industry
The Commercial Segment Will Showcase Highest Growth During the Forecast Period
- The commercial aircraft segment in Southeast Asia is poised for remarkable growth in the coming years. This can be attributed to several factors, such as the increasing air traffic, growing tourism, and rising expenditure on the aviation sector across the region. In 2021, the travel and tourism industry alone contributed over USD 143 billion to the Southeast Asian GDP. The easing of travel restrictions post-COVID has also led to a surge in international flight bookings to countries like the Philippines and Thailand.
- According to Travelport's booking data, in 2022, the Philippines and Thailand together represented over 50% of all international flight bookings to the region. In February 2022, international flight bookings rose by 114%, while daily flight bookings reached a staggering 294% in the Philippines. This trend is expected to continue in the coming years, leading to a further increase in air traffic.
- Moreover, the construction of new airports and the rising demand for new passenger aircraft will also fuel market growth. The Airport of Thailand (AOT) has planned major expansion projects at the Suvarnabhumi and Don Mueang International Airports in 2023, owing to a surge in passenger traffic. Boeing, an aircraft manufacturer, has projected that Southeast Asia will require 4,500 new airplanes worth USD 785 billion in the next 20 years. Therefore, the growing demand for passenger aircraft will continue to drive market growth in the region.
- In conclusion, the commercial aircraft segment in Southeast Asia is expected to witness remarkable growth in the coming years, owing to the increasing air traffic, growing tourism, and rising expenditure on the aviation sector. The construction of new airports and the demand for new passenger aircraft will further boost the market growth in the region.
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Indonesia is Estimated to Show Remarkable Growth During the Forecast Period
- Indonesia continues to dominate the aviation market, holding the largest market share during the forecast period. This growth can be attributed to several factors, including a high number of airports, increased spending on the aviation sector, and a surge in tourism throughout the country. The International Air Transport Association (IATA) predicts that Indonesia, with its 251 airports, will become the world's fourth-largest aviation market by 2036. Furthermore, Indonesia is currently the second-fastest-growing aviation market globally, after China, due to its expanding aircraft procurement and trade value.
- In December 2021, PT BIDU Panji Sakti signed a memorandum of understanding (MoU) with China Construction First Group Ltd (CCFG) for the construction of a new airport in Bali. The new airport is expected to be operational by 2024, further fueling the growth of the aviation market in Indonesia.
- The Indonesian government is committed to developing an environmentally friendly civil aviation sector throughout the country. PT Pertamina, the state-owned oil and gas corporation, is actively developing a palm oil-based aircraft fuel called Bioavtur J2.4 to reduce carbon emissions. The fuel is produced at the Pertamina International Refinery in Central Java, representing a significant step towards reducing the carbon footprint of the country's aviation sector.
- With increasing investment in the aviation sector and demand for new aircraft, the market in Indonesia is poised for continued growth in the years to come.
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