Why deepening EU-ASEAN ties in aviation is a win-win situation

Aviation is a strong driver of growth, jobs, trade and mobility for the world's economy. The European Union (EU) was one of the first markets to be fully deregulated in the 1990s and owes this to its success. As a result, European aviation today represents 26% of the world market, contributes €110 billion annually to Europe's Gross Domestic Product, and directly employs 2 million Europeans. As for consumers, they now benefit from lower fares, more choice and better connections. This is why I am following with great interest the process within the Association of Southeast Asian Nations (ASEAN), to create a single aviation area, and I am convinced that it would lead to a boom similar to what the EU experienced.

The rapid economic growth of Asia is already pulling the world economy's centre of gravity, and the air transport industry that serves it, to the East. The Asia Pacific region will account for around 40% of the world air traffic in 20 years and demand for air transport between the EU and the ASEAN region is booming. The air traffic between the two regions has grown by more than 75% over the past 10 years. These figures clearly illustrate the need for the EU and ASEAN, to strengthen our aviation relations as our two markets represent a combined population of 1.1 billion. This was highlighted also during the first ever EU-ASEAN Aviation Summit that took place in Singapore in February 2014.

That is why in December 2015, the European Commission adopted a new aviation strategy where we propose to negotiate the first ever bloc-to-bloc aviation agreement between the European Union and ASEAN. Such agreement would be an important building block in our ambition to bring the EU-ASEAN overall relationship to a higher level. This new partnership would improve mutual market access, provide investment opportunities and foster regulatory cooperation. In particular, it will create commercial opportunities for enhancing direct flights between Europe and ASEAN destinations, such as Singapore. Demand for air travel between the EU and ASEAN may be growing, but nearly all of it is currently channelled through indirect routes - notably through the Gulf, with neither European nor ASEAN carriers benefitting from it.

I therefore hope to be in a position to soon start negotiations, which is why I will travel to Singapore to directly discuss the matter with ASEAN Transport ministers who are gathered there for the Aviation Leadership Summit.

This approach has proved to be a win-win situation in the past. With the US and Canada the number of passengers increased by 3 million, with Morocco the number of direct routes increased by 87%, and with the Western Balkans the number of scheduled airlines increased by 59%. As we know more traffic means more jobs and more wealth. Evidence also shows that better connectivity leads to more trade and is a major determinant in the location choices of large firms' headquarters.

However while traffic growth offers tremendous economic opportunities, it poses an increasing challenge to the environment. As a low-lying island with 30% of its area being less than five meters above sea level, Singapore is exposed to the impact of climate change. According to the International Civil Aviation Organisation (ICAO), emissions from aviation are forecast to grow by at least 63% by 2020 compared to 2006. At the COP21 in Paris, both the EU and Singapore played an instrumental role to broker an historic deal, which gave the world a lifeline and I hope that we will now be able to build on this momentum. This year we will be working closely with ICAO on two ambitious global measures, the first is an unprecedented standard to cap Co2 emissions, which will push industry to be as fuel-efficient as possible. The second is a global mandatory system to offset aviation emissions, to stabilise emissions from 2020 in a cost-effective manner.

I am convinced that deepening the cooperation between the EU and ASEAN will be beneficial to our respective industries and citizens, and will also send a clear message: that the competitiveness of the aviation sector can be reconciled with its sustainability.