The Flight to Asia
By Tina Hsiao
With rising global oil prices, a continuing uncertain economic landscape in the west, and increased purchasing power in the east, airlines in the Asia Pacific are looking to cash in on intra-regional travels in the coming years.
According to the latest UNWTO World Tourism Barometer released in January 2012, global tourism arrival numbers reached 980 million in 2011, a 4.4% increase from the year before. The record tourism highs were reached despite a challenging year and a stagnant global economic landscape, political paradigm shifts in North Africa and the Middle East, and the devastating tsunami in Japan. "For a sector directly responsible for 5% of the world's GDP, 6% of total exports and employing one out of every 12 people in advanced and emerging economies alike", said UNWTO Secretary-General Taleb Rifai, "these results are encouraging".
The positive trend is expected to carry more momentum into this year, with international arrival numbers forecast to reach one billion in 2012, reflecting a relatively slower growth rate of 3 to 4%. Tourism in Asia and the Pacific is expected to outpace growth in Europe, with an expected 4 to 6% increase, putting it in a similar growth bracket as Africa, with Europe only expecting to grow between 2 to 4%.
Although 51% of all international arrivals in 2011 landed in Europe, Asia and the Pacific enjoyed the next big slice of 22%, representing a 8% and 6% growth when compared to the year before. The increase of 11 million arrivals is conservatively accredited to Northeast Asia and Oceania -- sub-regions that grew by 4% and 0.3% respectively -- both of which suffered due to the decline in the Japanese outbound market following the country's natural disaster. The real winners in the continent, however, were South Asia and Southeast Asia, both regions seeing a 9% leap in tourist arrivals, due largely to strong intraregional demand, bolstered by the supply of increasingly convenient flight connections.
Below are some of the most interesting new developments in regional air travel in the Asia Pacific region.
• AirAsia Japan, a joint venture between the Malaysia-based pioneer of LCC regionally and Japan's All Nippon Airways (ANA) recently announced domestic flights to commence in August of this year, with international routes opening two months later. The first international destinations including South Korea's Seoul and Busan.
• ANA is also involved in another JV to launch Peach Aviation, a Japan-based LCC that will commence flights in March, rolling out to three domestic destinations, as well as Hong Kong, and Taiwan. Other destinations are expected, with an increase of five domestic and three international in the near future, including Inchoen in South Korea.
• Not only is South Korea attracting a high number of travellers from its Asian neighbors, but the country is also a main source market for countries such as Japan and the Philippines. Another airline trying to tap into this emerging tourism powerhouse is Spring Airlines, the Chinese LCC that is preparing to begin flights later in the year.
• Gulf carrier Rak Airways has announced direct flights from its home base UAE to Bangkok starting in June.
• MASwings, a wholly owned subsidiary of the flag carrier Malaysian Airlines, based in Sawarak, earlier this year announced expansion plans both domestically and internationally with Brunei, Indonesia, and Philippines earmarked as future routes.
• Budget carrier Cebu Pacific has also announced plans for its network expansion by Q3'13, and will offer an increased connection with the Philippines from Oceania and further afield in Europe, Middle East, and the US. Also increasing services to Australia is China Southern Airlines, who plans to up its 35 weekly flights to 55 by 2015. Meanwhile, AirAsia X will be launching Kuala Lumpur to Sydney flights starting from April.
• Bangkok Airways will be increasing its Koh Samui - Hong Kong flight frequency from March onwards, bringing in more weekenders and tourists to the Thai tropical island, which already boasts direct flights to Singapore and other domestic destinations, as well as code-sharing programs with a number of carriers including a recent signing with Finnair. The self-styled "Boutique Airline" will also add a third international route, with daily flights to Kuala Lumpur from Koh Samui starting at the end of March.
• Jetstar is boosting its Japanese network with Singapore-Manila-Osaka serves starting end of March, which the company has said will double the capacity on the carrier's intraregional Osaka-Taipei-Singapore line. Recent company announcements have also been made regarding the launch of a new Tokyo-Manila-Darwin route.
• Another intraregional route with increased capacity is on Garuda Indonesia, who from the end of February, will be increasing its daily Jakarta - Kuala Lumpur flights. Earlier this year, Garuda has also announced its plans to reduce services on its European route, while stepping up its Asia Pacific connectivity, including the introduction of new Bali - Tokyo Haneda and Jakarta - Taipei routes. Also proof of the diminishing attractiveness of long haul routes, earlier in the year China Airlines halted direct flights to London.
• Just a month out the gate, Viet-Jet has seen a near-capacity load factor on its HCMC - Hanoi route, with talks of expanding internationally as early as Q4'12. Also connecting Vietnam with intraregional destinations is Korean Air, who will be adding to its 18 weekly flights with a new Danang route.
The boom in domestic and regional connections across the Asia Pacific is a clear indication that tourism trends are following the wider global economic shift East. The implications for travel industry as a whole are significant, and hospitality providers are already making adjustments to their services to match the expectations of a new clientele. The fact that Low Cost Airlines look set to play a major role in the region does not necessarily mean that demand for luxury accommodation and services will fall. After all, even wealthy travellers appreciate a bargain.