APAC aviation market takes off as total air passengers expected to double by 2021

Airports across the region are therefore turning to PPPs to address capacity constraints.

Asia Pacific’s aviation market is set to take off with the expectation that the total number of air passengers carried in regional carriers may grow 51% between 2016 to 2021, according to BMI Research.

BMI notes that Asia’s aviation sector has all the ingredients for strong growth over the next five years including rapid growth in air passenger traffic, sustained government investments for airport infrastructure and growing interest in public-private partnerships (PPPs) for airport expansion projects.

The air markets of China, India and Indonesia are poised for the fastest growth rates over the next four years whilst air passenger traffic in emerging markets like Bangladesh, Cambodia and Laos are also expected to grow rapidly over the next few years.

As such, airports across the region are increasingly faced with capacity constraints with three airports in India currently operating beyond capacity. Major airports in Indonesia, Philippines and China are also fast approaching their current capacities, according to BMI.

To address this growing problem, governments across the region are moving to expand airports and create new gateways with several infrastructure projects already in the pipeline.

“Strong growth in Asia's airports infrastructure sector is underpinned by the robust project pipeline sizes across the region's markets - our Key Projects Database tracks 175 major airport projects worth USD163bn currently in planning or construction stages in the Asia-Pacific region,” said BMI in its report, adding that China currently has at least 12 major airport projects valued at $38.7b in planning or construction stages.

BMI also expects that APAC economies will increasingly turn to PPPs for both greenfield and brownfield airport projects in an effort cater to growing demand for air services.

“India, the Philippines and Vietnam are notable for having a high proportion of their planned airport projects be PPPs, attracting interest from both domestic and foreign private participants. Japan, despite its slower growth outlook and limited airport expansion plans, has also expanded its PPP programme to include the privatization of existing assets.”

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