Home' Asian Aviation : AAV Feb 2014 Contents 4 AsianAviation | FEBRUARY 2014
The Singapore Air Show comes at a time
of relatively buoyant fortunes for many in
aviation sector. Airbus and Boeing are
straining to keep up with demand, and it s
a similar story in other sectors from MRO to the
engine manufacturers. Things are so good that
even the airlines are making money.
Against this rosy background, lurk plenty of
dangers. Aviation is a cyclical business, and
whichever way the economic winds are blowing
tends to have a significant impact on the industry.
There are some signs that the cycle may be at a
peak. "Global risks are rising. The cycle already
looks mature by historical standards," chief economist
at Henderson Global Investors said recently. Credit
tightening in China is another risk.
But underlying passenger demand in the Asia-Pacific
proved pretty resilient even as the world economy
generally was struggling. The latest IATA figures for
November show that Asia-Pacific carriers recorded an
increase in demand of 5.5% year-on-year, supported
by the stronger performance of major economies
such as China and Japan. However, with capacity up
6.8% on the previous year, the load factor slipped 0.9
percentage points to 75.4%.
Asia-Pacific s LCC sector is adding capacity at
roughly three times that rate, and although there
is plenty of untapped demand, the strains are
beginning to show. Tigerair s decision to throw in
the towel in the Philippines is just one sign of this.
Lim Kim Hai, the executive chairman of Australia s
Regional Express and this month s cover interview,
thinks that the industry is now more dangerous than
when he first entered it more than a decade ago,
and cites the placement of three-figure orders from
airlines that have very little track record as the main
reason for this. He predicts that a major LCC will hit
the buffers before the end of the decade. That will
certainly put the cat among the pigeons.
Only time will tell if he s right, but in the meantime,
the Singapore Air Show will no doubt see plenty of
order announcements - although it will do well to
beat the recent Dubai Air Show.
As with the last Singapore Air Show in 2012,
there will be much shuffling back and forth between
the Changi Exhibition Centre and nearby Seletar
The latter has been transformed from a sleepy
backwater into a hive of activity, with 45 companies
with facilities as of mid-January - and it wouldn t be
a major surprise if that number was increased during
the air show.
Singapore s model is being copied by others - but
it will be difficult to match. Apart from all the benefits
which we discuss in this issue, from the excellent
educational system to the supportive business climate,
the City State s small size is in this case proving to be
a blessing, as it means that it s easy to get around.
This is not just useful for aerospace companies.
Visitors to the show can get from the City Centre
to the Air Show in around half an hour by taxi.
Compare this to Farnborough or Paris! ✈
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As with the last Singapore Air Show
in 2012, there will be much shuffling
back and forth between the Changi
Exhibition Centre and nearby
Seletar Aerospace Park.
Lim Kim Hai, the executive
chairman of Australia s Regional
Express and this month s cover
interview, thinks that the industry
is now more dangerous than
when he first entered it more than a
decade ago, and cites the placement
of three-figure orders from airlines
that have very little track record as
the main reason for this.
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