Future of aviation in Asia

Today, Seattle-based Boeing celebrates its 100th anniversary, having been founded on July 15, 1916. Aviation has progressed remarkably since those early days to the point where almost everyone can fly today.

There is literally no place on Earth which you cannot visit in 24 hours or less from wherever in the world you are. Boeing remains one of the biggest aerospace companies in the world, along with its much younger European rival Toulouse-based Airbus. They are active in both civil and military aviation.Boeing and Airbus are by far the biggest manufacturers of airplanes (referred to in the industry as airframes) in the world today, although Canada’s Bombardier and Brazil’s Embraer are trying to chip away at this duopoly. Russia and China too are readying jets of their own to challenge this dominance.

Air travel is growing at a very fast pace given the rising disposable incomes in many parts of the world, entry relaxations in many countries and the rise and rise of Low Cost Carriers (LCCs) which sell tickets at a far cheaper rate by cutting down on “extras” such as in-flight meals. Airlines have also boosted their profits thanks to cheaper oil, which in turn has left them enough funds for investment in newer models of aircraft.

Air travel is also safer than ever before, which has raised the confidence of passengers. In fact, you are much more likely to die on the road in your car than in an airplane accident.

New planes

It is in this backdrop that Boeing and Airbus have raised their long-term (20 year) forecasts for new aircraft demand on Monday, on the sidelines of the biennial Farnborough Airshow, which opened last week 72 km southwest of London. Airbus and Boeing have enjoyed years of strong sales, with rising air travel and demand for new fuel-efficient planes raising the industry’s order backlog to a record 13,500 planes at the end of 2015, or near 10 years of production at current rates.

Boeing forecasts that airlines will need 39,620 new aircraft worth $5.9-trillion over the next 20 years, up 4.1 per cent from its estimate last year. “Despite recent events that have impacted the financial markets, the aviation sector will continue to see long-term growth with the commercial fleet doubling in size,” says Randy Tinseth, vice president of marketing at Boeing Commercial Airplanes. Boeing forecasts that airline passenger traffic would increase by 4.8 per cent per year over the next two decades.

Airbus raised its 20-year demand forecast to 30,070 new aircraft, up 500 from its previous estimate, and saw passenger traffic rising by an average 4.5 per cent per year. “Middle classes in emerging markets will double to 3.5 billion people by 2035,” said Airbus said in a statement, predicting particularly strong demand in China and India.

A380 dying?

There are two significant factors at play. Both Airbus and Boeing said demand for single-aisle jets such as the A320 and Boeing 737, rather than twin-aisled planes (such as Airbus A330 and Boeing 787 Dreamliner) or four-engined superjumbos (Such as Airbus A380 and Boeing 747-8 Intercontinental), were behind the increases in their 20-year forecasts.

Another factor is that air travel is growing at the fastest rate in the Asia Pacific, where China and India alone will need thousands of new planes just for domestic travel. Almost on cue, AirAsia, the region’s largest budget carrier, ordered 100 single-aisle fuel-efficient A321neo jets, valued at $12.5 billion, while India’s low-cost Go Air signalled its intention to buy 72 of them, amounting to $7.7 billion. Boeing too has an order for 20 737 MAX 8s from Air Europa.

In fact, Airbus has just cut its delivery target for the massive A380 to just 12 planes a year from 2018 as major airlines have walked away from the huge four-engined airliner in favour of twin-engined wide bodied models that have a similar range and more efficient passenger packaging.

Airbus had originally anticipated that it would sell 1,200 jets over two decades, but the manufacturer has delivered only 193 of the double-deckers since it came into service in 2007. (Boeing builds just six 747s a year). Only three airlines (Emirates, Qantas and Singapore) have ordered more than 20 of them. Emirates already has 81 of them with another 61 on order, but the fate of the behemoth is unclear once that order book dries up.

Boeing wants to build a 777-10X that can carry around 450 passengers, which is dangerously close to the A380’s 515-550 – no airline carries the 800 promised by Airbus. This may hasten the death of big superjumbos from both companies and airlines too are in a win-win situation because they will burn much less fuel. Airports too do not need any additional modifications. Airbus itself could stretch its A350-1000 model to cannibalize A380 and even A330 sales.

More new planes will mean greater route flexibility and all-new routes, but airlines must also think about their passengers, especially in the “cattle class”. Airbus has a horrendous plan for 11-abreast seating which we hope will never come to pass.

Airline cabins are cramped enough already and the food is often nothing to write home about. Long security lines are another concern though given the present circumstances this has become a necessary evil, regardless of the inconvenience caused.

Airlines must strive to improve all these aspects. Sri Lanka too stands to gain from the rapid expansion of the Asia-Pacific aviation industry especially on the completion of the Bandaranaike International Airport improvement project in a few years from now. The Government must strive to improve the domestic air travel sector – right now, there is only one operator. We need bigger aircraft on domestic routes with reasonable ticket prices which will attract both locals and foreigners. The Government’s ongoing programme to improve all domestic airports must also be commended, but an international airport should be developed in Jaffna or Trincomalee, which will attract direct flights from foreign capitals. And why not develop Ratmalana too as Colombo’s second international airport (many cities have a second airport) at least to handle single-aisle planes such as the Airbus A320 ? Aviation presents many opportunities in our region, but there is no time for delay.