Singapore PM urges ASEAN to liberalize aviation


Singapore (Thomson Financial) - The Association of Southeast Asian Nations

should take "bold steps" to achieve a single aviation market by 2015,

Singapore Prime Minister Lee Hsien Loong said Thursday.

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, characterised 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.

"We have to quickly follow through on this, and meet the first milestone of freeing access between ASEAN capitals by December 2008 on time," Lee said.

But the International Air Transport Association (IATA) said Wednesday ASEAN still significantly lagged Europe in deregulating the aviation sector despite moves to liberalize air travel.

IATA regional vice president Mike Barclay 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 secretary general Ong Keng Yong, who attended the transport ministers' meeting, said Barclay's assessment was unfair.

"In ASEAN, we are opening up our air services sector in a manner which we believe will contribute to the development of the air travel business, the air travel industry," Ong told reporters.

"But we believe that as a region, we have done quite a lot, more than what other regions have been doing."

ASEAN, which groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, is market of more than 500 million people.

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More