Kuala Lumpur, 15 November 2018 – Today, IDEAS has published a paper titled “Economic Benefits of ASEAN Single Aviation Market” by IDEAS 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 be more than three times easier for ASEAN citizens to travel by air by 2030.
This paper follows last week’s meeting of the Air Transport Ministers (ATM) in Singapore, where ministers progressed the ASEAN Single Aviation Market by signing Protocol 4 on “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. Following the meeting, Transport Minister YB Anthony Loke noted the importance of Malaysian leadership in driving the implementation of the ASEAN Single Aviation Market. In the paper, Adli Amirullah welcomes this progress and Minister Loke’s commitment to further liberalising ASEAN’s aviation markets.
Commenting on the paper’s release, IDEAS Director of Reseach, Laurence Todd said, “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 Low Cost Carriers. The aviation sector is also a major employer across ASEAN, and we estimate that if it continues to grow through further liberalisation it will create over one million more jobs across ASEAN by 2030 and contribute nearly 100 billion USD to the economy every year.”
“The progress made at last week’s Air Transport Ministers meeting in Singapore is very encouraging, and we applaud the strong leadership being shown by Transport Minister Anthony Loke. We believe that further liberalisation of ASEAN’s aviation market can deliver a huge boost to trade, investment and tourism and we welcome Malaysian leadership on this agenda, under the new government.”
“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.”
In addition to the economic analysis, the paper proposes a series of recommendations to accelerate implementation of the ASEAN Single Aviation Market, including (1) provide a formal platform for the Directors General of all ASEAN Member States’ Civil Aviation Authorities to discuss the ways to overcome the specific challenges in achieving the ASEAN Single Aviation Market; (2) allow open access to aviation information between the ASEAN Member States; and (3) intensify the process of ASEAN harmonisation by pushing forward the Mutual Recognition Agreements for aviation-related services at a faster pace; and (4) Prioritise Full Implementation of ASEAN Community Carriers.
The paper can be accessed from the IDEAS website at here
IDEAS Estimates of Growth in aviation in ASEAN 2014 – 2030
Source: IDEAS analysis