General Electric : SilkAir’s Growth Leaps On Regional Demand

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The arrival and departure halls of major Asia Pacific airports such as Changi in Singapore, Pudong in Shanghai, Suvarnabhumi in Bangkok, and Seoul Incheon, and others in popular smaller city airports such as Hiroshima, Tribhuvan in Kathmandu, and Australia's Cairns Airport have never been busier.

Of the 3.8 billion people who caught a flight last year, 1.1 billion (35%) were passengers in this region according to 2017 IATA World Air Transport Statistics. IATA also anticipates that Asia-Pacific will be the source of more than half the new passengers over the next 20 years and expects 7.2 billion passengers to travel in 2035.

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Bullish on ASEAN

ASEAN markets are predicted to be a prominent driver of this growth, prompting Boeing Co to announce an increase of its 20-year forecast for the region by 460 aircraft, the largest jump of any region globally. Boeing sees demand for 4,210 new planes worth $650 billion in Southeast Asia over the next two decades, based on an estimate of annual traffic growth of 6.2%.

Boeing's predictions are driven by factors such as a developing ASEAN Single Aviation Market, increased aviation infrastructure investment, the proliferation of low-cost carriers, and an expanding middle income class (88% of the next billion people entering the middle class will be from Asia).

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SilkAir an early mover

The Asia Pacific growth opportunity is also influencing ASEAN-based airlines to expand their fleets, and upgrade services and facilities, and SilkAir, the regional wing of Singapore Airlines, is an early mover on these fronts. SilkAir recently received the first of 37 Boeing 737 MAX 8 ordered, allowing them to reach longer haul destinations across the region.