CAREC Aviation Istanbul, Turkey 18-19 April 2018
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CAREC Aviation Istanbul, Turkey 18-19 April 2018 Aviation and the Role of CAREC: A Scoping Study Part I CAREC Aviation Scoping Study March 2018 Major findings . By regional and international standards, inter-CAREC air connectivity is poor . Lack of regional and bilateral air agreements restricts access . Large potential for aviation growth, especially in the tourism sector 1. Policy Connectivity within CAREC 0.073м 1 Million seats per week 0.073м International Intra-CAREC seats per week seats per week Excluding People’s Republic of China (PRC) Less than half of all country pairs within CAREC are served with direct flights Weekly scheduled frequencies between CAREC countries (as of September 2017) Source: OAG Kyrgyz Afghanistan Azerbaijan Georgia Kazakhstan Mongolia Pakistan PRC Tajikistan Turkmenistan Uzbekistan Republic Afghanistan 1 8 1 Azerbaijan 21 23 ? 5 ? 6 2 Georgia 21 21 3 Kazakhstan 1 23 21 13 41 8 2 18 Kyrgyz Republic 13 3 10 2 2 Mongolia ? 3 53 Pakistan 8 12 2 Tajikistan 8 2 ? 7 ? 1 Turkmenistan 6 ? 2 4 Uzbekistan 2 18 2 2 8 1 Total 10 57 45 127 30 56 22 144 18 12 33 Total 554 frequencies 2% 10% 8% 23% 5% 10% 4% 26% 3% 2% 6% Most airlines serving CAREC are country-constrained Количество обслуживаемых Количество обслуживаемых Airline стран ЦАРЭС аэропортов в регионе Air China 3 4 Air Kyrgyzstan 1 1 Aero Mongolia 1 1 Air Astana (Kazakhstan) 6 7 Air Manas (Kyrgyz 1 1 Ariana (Afghanistan) 1 1 Avia Traffic (Kyrgyz 2 2 AZAL (Azerbaijan) 3 3 China Southern 8 10 Georgian Airways CAREC 0 0 Hainan Airlines 1 CAREC 1 Hunnu Air (Mongolia) countries 1 4 Kam Air (Afghanistan) 1 airports 2 MIAT (Mongolia) served 1 served 1 PIA (Pakistan) 2 2 SCAT (Kazakhstan) 3 5 Shaheen Air (Pakistan) 1 1 Somon Air (Tajikistan) 2 2 Suparna (PRC) 1 1 Tajik Air (Tajikistan) 3 3 Turkmenistan Airlines 2 2 Uzbekistan Airways 6 8 Number of CAREC countries served Number of CAREC airports served 6 Source: OAG CAREC propensity-to-travel is below countries with similar GDP/capita 10 Propensity to Travel- 2016 Hong Kong Singapore Malaysia Japan 1 Thailand Vietnam Indonesia Philippines PRC Kazakhstan Azerbaijan Turkmenistan Laos Mongolia Tajikistan Trips per capita per Trips 0.1 Kyrgyzstan India Uzbekistan Cambodia Georgia Afghanistan Myanmar CAREC Pakistan 0.01 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 Gross Domestic Product (GDP) per capita in US $ 2. Infrastructure and Fleets Expansion of the Astana International Airport 8 Renovation of Tbilisi International Airport New Ashgabat International Airport New Ulaanbaatar International Airport New Islamabad International Airport 12 Islamabad Bus Rapid Transit Project Connectivity between new airport and the city 13 Fleets CAREC country Number of Number of No. of Total active Passenger wide-body narrow-body regional fleet aircraft/ aircraft aircraft aircraft freighters Afghanistan 3 8 5 16 15/1 Azerbaijan 22 12 9 43 25/18 PRC 386 2,619 234 3,239 3,158/81 Georgia 9 8 6 23 12/11 Kazakhstan 4 36 52 92 90/2 Kyrgyz Republic 0 11 6 17 14/3 Mongolia 2 4 10 16 16/0 Pakistan 16 47 23 86 85/1 Tajikistan 1 11 8 20 14/6 Turkmenistan 3 21 0 24 24/0 Uzbekistan 12 13 13 38 34/4 Total 458 2,790 366 3,614 3,487/127 Total (ex. PRC) 72 171 132 375 329/46 Opening up secondary markets with smaller, regional aircraft 3. Operations Immigration capacities and excessive visa restrictions constrain travel Paperless “e-cargo” systems can dramatically improve freight efficiency Current processes in CAREC can involve over 30 documents for a single shipment shippers Invoice consignees Packing List Invoice Packing List Invoice Packing List Air Waybill House Manifest House Waybill House Manifest Air Waybill origin destination freight freight forwarders carriers forwarders Customs Customs Release Release House Manifest Air Waybill Export Goods Import Goods Flight Manifest Declaration Declaration export Customs import customs Customs Release customs Release Import Cargo Export Cargo Declaration Declaration physical cargo flow document / data flow Study Recommendation CAREC countries could adopt a gradual, phased approach to managed competition e.g. Allowing open access to unserved city pairs Phased Approach: Move towards granting third and fourth freedom rights within CAREC Nine Rights of Freedom in Aviation ? 20 Marketing Connectivity Turkish Council and Turkish Airlines: “The Modern Silk Road Tour Package” Part II. Case Studies 1. Malaysia-Singapore Case Study Market Opening: Singapore-Malaysia (2008) Pre-liberalisation (2003 – 2008) Post liberalisation (2009 – 2016) Weekly services (as at Jan 03): 210 Weekly Services (as at Dec 16): 538 City links (as at Jan 03): 5 City links (as at Dec 16): 8 0.5 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 OD Pax Movts (mil) between SIN andMalaysia SIN (mil) Movtsbetween Pax OD 0.05 0 Source: Civil Aviation Authority of Singapore (CAAS) Singapore’s terminal 4 and 5 expansion 2. Siem Reap Case Study 26 Cambodia: 30% of total visitors enter Cambodia via Siem Reap Siem Reap 99% of traffic are international visitors/tourists Siem Reap Airport annual passenger traffic: 2008 to 2017 5,000,000 4,000,000 passenegrs 3,000,000 2,000,000 1,000,000 Total arriving arriving Total 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Year 27 Siem Reap accounts for $1 billion of tourist spending Cambodia - total visitors and tourist expenditure $3.50 6,000,000 $3.00 5,000,000 $2.50 4,000,000 US$ US$ billions $2.00 - 3,000,000 $1.50 2,000,000 $1.00 Total Visitor numbers Visitor Total Visitor spend spend Visitor $0.50 1,000,000 $0.00 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Year $ millions (spend) Total tourists 28 Siem Reap is well-connected to Asia with mostly daily non-stop flights 3. Petra Case Study 30 Petra2 Attribution Copyright: <a href='https://www.123rf.com/profile_siempreverde22'>siempreverde22 / 123RF Stock Photo</a> Source: 1 http://www.jordantimes.com/news/local/petra-witnessed-increase-number-visitors-january’ 2 https://scth.gov.sa/en/mediaCenter/News/GeneralNews/Pages/z-g-3-13-7-16.aspx 470,000 Petra2 Attribution Copyright: Copyright: <a Petra2 Attribution Petra href ='https://www.123rf.com/profile_siempreverde22'>siempreverde22 Photo</a> Stock / ='https://www.123rf.com/profile_siempreverde22'>siempreverde22 123RF , Jordan Two 300 B.C. civilisations 300 B.C. Two A tale of two sister cities… sister oftwo A tale Tourists Tourists Saudi Arabia Saudi Madain ~20,000 Saleh 2017 Tourists 31 Coordinated Aviation, Visas, Infrastructure, & Tourism Marketing 2018 2017 2019 P Visas O P ’ Site access january - P visitors P P - 16.aspx - 7 - 13 - number 3 - Petra2 Attribution Copyright: <a - href='https://www.123rf.com/profile_siempreverde22'>siempreverde22 / 123RF g - Stock Photo</a> increase - Hotels 470,000 P PP ~20,000 witnessed - petra P Tourist attractions O P Petra Madain Saleh 32 http://www.jordantimes.com/news/local/ https://scth.gov.sa/en/mediaCenter/News/GeneralNews/Pages/z Source: 1 2 4. Georgia and Azerbaijan Case Studies 33 Georgia has demonstrated a more open market, lower fees and taxes can dramatically stimulate demand . Visa free entry to citizens of nearly 100 countries . Developed Kutaisi as a low-cost airport, attracting budget airlines to Europe . New rail links for more accessibility Growth in Georgia’s annual aviation passenger traffic from 2010 to 2017 Source: Georgia Civil Aviation Authority Azerbaijan Baku airport traffic increase +23% for 2017 . Introduced an e-visa system Total of 4.06 million passengers in 2017 for nearly 100 countries . Low taxes and airport A total of 55 airlines served Baku, passenger charges AZAL had 55% share or 2.2 million passengers The benefits of promoting the creation of Low-Cost Carriers (LCCs) . Buta Airways (Azerbaijan) as a catalyst for market growth . Lower fares enable a larger portion of the local population to fly and boosts inbound tourism 36 Part III. Tourism and CAREC economic development 37 Current city pairs served in Central Asia region* * Analysis excludes Pakistan, Afghanistan, PRC 38 Unserved city pairs in Central Asia region* * Indicative analysis excludes Pakistan, Afghanistan, PRC City population > 50,000 people Distance >100km between cities ILLUSTRATIVE ONLY 39 Non-stop flights in CAREC can substantially reduce travel times Departure Departure Connection Check-in/Board Flight Transfer/Board Flight One-Two 2-8 hours 1-6 hours 2 – 8 hours Stops e.g. Istanbul, Kabul Moscow, Ufa, Baku Total time Warsaw, Urumqi, Minsk, Kiev 10-25 hours Non-stop Total time Non-stop Flight 1-3 hours 1-3 hours 40 Successful airlines like Ryanair have created a 300 aircraft, 130 million annual passenger operation mostly on un-served city pairs Source: http://www.airlineroutemaps.com/maps/Ryanair Connectivity to many secondary cities can open vital tourism markets for CAREC 42 CAREC has many tourism & UNESCO sites near airports UNESCO sites Airports 43 Minaret and archeological remains of Jam, Afghanistan Gobustan Rock Art, Azerbaijan Upper Svaneti, Georgia Saryaka, Kazakhstan Chang’an Tianshan Silk Road Corridor, Kazakhstan, Krygyz Republic, and PRC Western Tien-Shan / Aksu-Jabagly State Nature Reserve, Kazakhstan, Kyrgyz Republic, and Uzbekistan Uvs Nuur Basin, Mongolia Landscapes of Dauria, Mongolia Rohtas Fort, Pakistan Mogao Caves, PRC Sarazm, Tajikistan Tajik National Park, Tajikistan Parthian Fortresses of Nisa, Turkmenistan Itchan Kala, Uzbekistan CAREC* countries have high growth potential for tourism Country % contribution to GDP Cambodia 32.4 CAREC average 5.2 Azerbaijan 14.6 Georgia 27.1 Kazakhstan 6.2 Kyrgyz Republic 3.9 Mongolia 11.4 Pakistan 6.9 * Excludes PRC, and no data available for Afghanistan and Tajikistan 8.2 Turkmenistan Source: World Bank 2016 Uzbekistan 3.1 The prize of enhanced CAREC tourism Potential growth of 10% (short- term) to 50% (medium term) above current direct contribution could contribute another US$1.39-$6.95 billion Based on data from WTCC, 2016 and World Bank to the economies of CAREC.