3 the Development of Regional Airports in Asia

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3 the Development of Regional Airports in Asia 3 The development of regional airports in Asia Y-C. Chang National Taiwan Ocean University, China Abstract Countries in Asia are more diverse politically, economically and culturally than those in North America and Europe, with each of them differing in their approach to deregulation. This chapter reviews and analyses the regional airports development in Asia. It concludes that Asian airport operators will be facing a challenging time ahead with air traffic growth at a reduced pace and volatility in fuel prices affecting airline business. In addition, the LCCs continuing growth in Asia, consumer need for point-to-point travel and scarcity of secondary airports in Asia have opened up many opportunities for airport operators and investors. Keywords: Taiwan; China; ASEAN; low-cost carriers. 1 Introduction 1.1 Characteristics of Asian air transport industry Over the past few decades, Asia has grown more rapidly than any other part of the world economy. Its trade and industrial transformation has been built upon openness and integration into the world economy, with a continual process of reform and liberalization in a succession of Asian economies. The strong economic growth led to a rapid increase in the demand for air travel in the region of Asia. Total international scheduled passenger traffic to, from and within the region grew by 7.4% per annum on average between 1985 and 2005. The global share of Asia-Pacific international scheduled passenger traffic increased from 25.5% in 1985 to 28.3% in 2005. The airlines of Asia-Pacific region are expected to show the highest growth in passenger traffic, at 5.8 % per annum through to the year 2025, while the airlines of North America are anticipated to show the lowest growth, around 3.6% per annum. As a result of the projected growth in passenger WIT Transactions on State of the Art in Science and Engineering, Vol 38, © 2010 WIT Press www.witpress.com, ISSN 1755-8336 (on-line) doi:10.2495/978-1-84564-143-6/03 54 DEVELOPMENT OF REGIONAL AIRPORTS traffic, the airlines of the Asia-Pacific region are expected to increase their share of world passenger traffic (in terms of passenger-kilometres) by about 6.5% points to 32.52%, the highest among all the regions, with their share of total international scheduled passenger traffic increasing to about 33.7% (see Figure 1, International Civil Aviation Organisation [11]). Figure 1: Share of total international scheduled passenger traffic by each region. Table 1 reveals that regional platforms enjoyed the highest year-on-year growth on a percentage basis, up 7.3% against a 5.6% rise for Intercontinental hubs and 5.4% for Secondary hubs. Regional platforms in Asia/Oceania were still above the world average and well ahead of their counterparts in North America and Western Europe, owing mainly to the explosion of domestic traffic in China and India but also, and increasingly, in Indonesia and Vietnam (Air Transport World [4]). Table 1: 2006–2007 Airport traffic growth by continental and airport type. Unit: % Airport type World Western North Asia/Oceania Europe America Intercontinental 5.6 5.5 2.3 8.2 hubs Secondary hubs 5.4 6.1 4.1 6.3 Regional 7.3 6.7 4.2 10.7 platforms Source: Air Transport World [4]. WIT Transactions on State of the Art in Science and Engineering, Vol 38, © 2010 WIT Press www.witpress.com, ISSN 1755-8336 (on-line) DEVELOPMENT OF REGIONAL AIRPORTS IN ASIA 55 According to ‘World Airport Traffic Analysis 2007’ report, China and India continued to pull demand with a 70% share of the region’s traffic volume increase in 2007 (Figure 2). China’s airports handled some 395.4 million passengers, up 16.7%. It accounted for 54% of the region’s growth or 17% of the world growth. Throughput at Indian airports rose 19.9% to 97.6 million whereas traffic in the region’s second-largest market. Vietnam and Philippines recorded significant growth rates, up 25.8% and 20.4% respectively. The strong economic development, particularly in China and India, with an emerging middle and upper class has really stimulated air traffic demand. In addition, domestic markets are fuelling country and regional growth. Domestic traffic accounted for 54% of China’s total growth in 2007 (Figure 3). In India, the imbalance between domestic and international travel was even more pronounced; domestic traffic accounted for 96% of the growth in passenger throughput in 2007. In Vietnam, 63% of the 3.9 million additional passengers in 2007 flew within the country whereas in Indonesia domestic travel soared 118%. Figure 2: Distribution of Asian airport traffic evolution by country 2007 vs. 2006. (passengers in millions) WIT Transactions on State of the Art in Science and Engineering, Vol 38, © 2010 WIT Press www.witpress.com, ISSN 1755-8336 (on-line) 56 DEVELOPMENT OF REGIONAL AIRPORTS Figure 3: Split of mainland China growth per destination. 1.2 Trend of major international airport development Given the rapid economic growth in Asia-Pacific, the region has a large number of busy airports, with twelve recording passenger traffic levels in excess of 20 million in 2007 (Table 2). Nine of the airports were ranked among the top 50 in the world in terms of passenger volume. In order to meet the growing demand and become regional hubs, substantial investment has been carried out in the region in recent years. New Kansai Airport opened in 1994, Hong Kong Chek Lap Kok Airport in 1998, New Kuala Lumpur Airport in 1999, Taipei CKS second terminal in 2000 and Seoul Incheon Airport in March 2001, Japan Nagoya Airport in 2005, second Bangkok International Airport in 2006, and Singapore Changi airport terminal 3 in 2008. In particular, Beijing’s enormous Terminal Three opened in time for the Olympic Games in August 2008. In these major international airports, Seoul Incheon Airport is the hub of Skyteam alliances in Asia; Singapore Changi and Bangkok Airports are the regional hubs for Star alliances; and Hong Kong Airport is the hub for Oneworld alliances. 1.3 Regional Airports in Asia Due to the large number of airports in Asia, identifying the definition of regional airports becomes a difficult task. This chapter uses the Air Transport Intelligence Database [3] with the criteria, International Passengers less than one million, and Domestic Passengers more than 80 millions in 2007. The result comes out with 47 airports as showed in Table 3. Among these nations, Indonesia is the first country to liberalize its air transport sector. Indonesia is expected to have the fastest annual growth in international traffic during the 1990s, followed by Malaysia (Dempsey [10]). The government is planning to construct new airports at Medan and Padang in Sumatra, and in central Lombok. WIT Transactions on State of the Art in Science and Engineering, Vol 38, © 2010 WIT Press www.witpress.com, ISSN 1755-8336 (on-line) DEVELOPMENT OF REGIONAL AIRPORTS IN ASIA 57 Table 2: Major international airport characteristics in 2007. Total Main hub Airport Passenger(000) Runways(metres) Movements airlines 1*3,800 Beijing Capital 53,737 399,697 Air China 1*3,200 Shanghai 28,930 187,045 China Eastern 1*3,300 Pudong 1*3,600 Jakarta 31,987 248,482 Garuda Airlines 1*3,660 Tokyo Narita 35,530 195,074 Japan Airlines 1*4,000 All Nippon Osaka Kansai 16,592 125,637 1*3,500 Airways Korea Airlines 1*3,600 Seoul Inchon 31,422 213,194 Asiana Airlines 1*3,200 Malaysia 1*4,000 Kuala Lumpur 26,534 193,688 Airlines [14] 1*4,019 Philippine 1*2,225 Manila 20,468 188,797 Airlines 1*3,409 Singapore Singapore 1*4,000 36,702 223,488 Changi Airlines 1*3,260 China Airlines 1*3,660 Taipei CKS 23,426 160,120 EVA Air 1*3,350 1*3,700 Bangkok 41,210 265,763 Thai Airways 1*3,500 Hong Kong 46,995 305,010 Cathay Pacific 2*3,800 Source: Air Transport Intelligence Database. In these regional airports, some are popular tourist island airports, like Haikou in China, Bali in Indonesia, Jeju in Korea, Okinawa in Japan, Langkawi in Malaysia, and Phuket in Thailand. Because of their excellent weather and beautiful beach, these island airports attract lots of passengers each year. Bali is the most famous tourist island in Indonesia. Its Ngurah Rai – Bali International Airport started operation in 1931 by using a grass runway. The runway was upgraded during the period of 1941 to 1947 and lengthened to 1600 metres. It was named Tuban Airport as it’s located in Tuban Village. Haikou Meilan International Airport is located on the southern island province of Hainan, which is partly-owned by the Hainan Airlines Group. It maintained a double-digits growth in passenger throughput, aircraft movements, and cargo throughput in 2008, and achieved the highest growth rate among the civil aviation airports in China. Phuket International Airport ranks second in Thailand in terms of passenger and cargo volume. Phuket Island and nearby provinces are popular resort areas and Phuket International Airport enjoys a large number of passengers from all over the world, and plays an important role in promoting travel and tourism in the southern region as well as throughout the kingdom. The airport is served by ten airlines, carrying more than 2.9 million passengers and WIT Transactions on State of the Art in Science and Engineering, Vol 38, © 2010 WIT Press www.witpress.com, ISSN 1755-8336 (on-line) 58 DEVELOPMENT OF REGIONAL AIRPORTS 12,000 tons of cargo on 27,000 flights (data of 2007). The airport is located 32 km from downtown Phuket.
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