Malaysia-based Institute for Democracy and Economic Affairs IDEAS published two weeks ago a report titled “Economic Benefits of ASEAN Single Aviation Market” by economist Adli Amirullah. The paper explains how air transport plays a crucial role in the overall economic prosperity of ASEAN.
In the paper, Adli Amirullah argues that market liberalisation through the ASEAN Single Aviation Market (ASAM) has delivered significant economic benefits to the citizens and businesses of ASEAN by lowering prices and increasing consumer choice. ASAM has also boosted tourism which is a key component of ASEAN’s economy. Furthermore, ASAM has facilitated trade, and made ASEAN a more attractive place for foreign investment.
Looking further ahead, Adli Amirullah argues that further liberalisation through ASAM will be required if future growth in passengers can be maintained. If that happens, Adli Amirullah estimates that growth in the air transport industry will support over 1 million more jobs across ASEAN by 2030 and contribute nearly 100 billion USD to the economy every year. Furthermore, Adli Amirullah also estimates that it will generate three times more opportunities for ASEAN citizens to travel by air by 2030.
This paper followed a recent meeting of ASEAN Air Transport Ministers in Singapore, which materialized with the signature by Protocol 4 over the ASEAN Single Aviation Market. The protocol implements “Co-Terminal Rights between Points within the Territory of Any Other ASEAN Member State”, which will allow airlines to expand their networks to domestic routes within other ASEAN countries.
According to the report, ASEAN largest countries can expect to see the biggest increases in new jobs and GDP , given the size of their domestic markets, particularly Indonesia, the Philippines, Vietnam and Thailand.
Following the meeting, Transport Minister YB Anthony Loke noted the importance of Malaysian leadership in driving the implementation of the ASEAN Single Aviation Market.
According to IDEAS Director of Reseach, Laurence Todd, “The ASEAN Single Aviation Market has already delivered huge benefits to tourists, businesses and citizens across ASEAN. The cost of some routes has more than halved in the last few years due to increased competition, in particular from LCC.
The progress made at Air Transport Ministers meeting in Singapore is very encouraging. We believe that further liberalisation of ASEAN’s aviation market can deliver a huge boost to trade, investment and tourism.”
“Of course, there is still further to go and many of the measures previously agreed remain behind schedule. We recommend setting up a formal platform for national regulators to drive faster implementation; advancing the Mutual Recognition Agreements which will enable flight crews to operate anywhere in ASEAN; and prioritising the full implementation of ASEAN Community Carriers.
ASEAN Community Carriers would follow the concept of the concept implemented by the European Union for all the airlines based in the EU which benefit all of similar advantages regarding air traffic rights across the 28 countries of the Union.