ASEAN long way from liberalizing aviation industry

SINGAPORE (AFP) – Southeast Asia still significantly lags Europe in deregulating the aviation sector despite moves to liberalize air travel, the International Air Transport Association said.

Mike Barclay, regional vice president of the body, commonly known as IATA, said a string of regulations obstructed carriers in the region and hampered the industry’s growth.

"We don’t see any relaxation of foreign ownership controls ... we don’t see the opportunity for airlines to operate domestic sectors in another ASEAN country," Barclay said at an aviation conference in Singapore.

"So I think there is a long way to go."

ASEAN is the 10-member Association of Southeast Asian Nations, which wants airlines from member nations to be free to fly between regional capital cities by the end of 2008 under an open-skies agreement.

Barclay said deregulation over the last 15 years had forced airlines in Europe, such as Lufthansa and British Airways, to shape up.

"They have adapted, they have re-engineered themselves, they are now very strong," he said.

Bold steps

The ASEAN should take "bold steps" to achieve a single aviation market by 2015, Singapore Prime Minister Lee Hsien Loong said.

Countries which can move faster to open up their aviation sectors for competition should do so and let other states join in later, he said in a speech at the opening of an ASEAN transport ministers’ meeting.

"Such bold steps will put ASEAN in a strong position to benefit from the rapid growth in travel demand around the region. It will also show the world that ASEAN can take decisive action to transform its plans into concrete outcomes," he said.

The target will coincide with ASEAN’s plans to establish an economic community, characterized by free trade flows, by 2015.

Southeast Asian transport ministers have agreed that their respective national airlines will be free to fly between regional capital cities by the end of 2008 under an open-skies agreement.

This can be expanded at a later date to include other cites within the regional bloc.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.