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Malaysia Airlines mystery unfolds in booming aviation region

March 20, 2014, Hong Kong, China - The transfixing mystery of the Malaysia Airlines jet that went missing with 239 people on board has unfolded in a region where air travel is undergoing supercharged growth after decades of being beyond the reach of most people.


March 20, 2014
By The Associated Press

The still unknown fate of Flight 370, which vanished from civilian
radar on a nighttime flight from Kuala Lumpur to Beijing on March 8, has
riveted the flying public and baffled experts. The backdrop is also
compelling even if far removed from the headlines.

 

Air travel in Asia is surging as the
middle class gets bigger, discount airlines proliferate and business
ties with the rest of the world deepen. Airports are scrambling to
expand as they bulge with passengers and an upstart Indonesian carrier
has given Boeing and Airbus their biggest jet orders ever.

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The region's economic boom, seeded in the early 1990s by China's embrace of market style reforms, is the underlying reason.

 

"When you're poor you can't afford to
fly," said Andrew Herdman, director general of the Association of Asia
Pacific Airlines. "The big development of the demographics of Asia in
the past 20 years has been the sheer number of people who have been
lifted out of poverty into that middle income segment" of $10-$100 of
disposable income a day.

 

The International Air Transport
Association has forecast airline passengers to grow by 31 per cent
worldwide between 2012 and 2017. For Asia, that will mean the number of
passengers increases an average of 6.3 per cent each year, nearly three
times as fast at the U.S.

 

Routes within or connected
to China will be the single largest driver of growth, accounting for
nearly a quarter of the additional 300 million passengers during those
six years.

 

Whether the Malaysia Airlines jet
succumbed to a sudden catastrophe, hijacking or malicious pilot action,
it is unlikely to change a two decade trend of ever more travellers,
routes and planes.

 

"People become cautious about a particular airline for a while but you don't see travel patterns change," said Herdman.

 

Asian demand is a big reason why airlines
are on the largest jet-buying spree in aviation history, ordering more
than 8,200 new planes from Airbus and Boeing in the past five years.
There are now 24 planes rolling off assembly lines each week, up from 11
a decade ago. And that rate is expected to keep climbing.

 

The bulk of the planes are going to new
or quickly-growing airlines that serve the expanding middle class in
China, India and Southeast Asia.

 

In Asia alone, Airbus has 1,375 unfilled airplane orders or about a quarter of its worldwide order book.

 

The low cost carriers are
the hungriest buyers. Malaysia-based AirAsia and its affiliate AirAsia X
together have orders for 385 new planes. Those new planes alone have
enough seats to put an additional 60,000 passengers in the sky at the
same time. Many of those planes will make multiple flights a day,
sending that figure even higher.

 

Indonesia's Lion Air has an order for 234
jets from Airbus and another 301 from Boeing. That's in additional to
the 107 Boeing jets it currently flies.

 

They're just two of the numerous low
budget airlines that have opened up in the past decade, mostly in
Southeast Asia, to service the growing demand for affordable air travel.

 

Even China, which for years has enforced
restrictive policies aimed at supporting the three dominant state-owned
carriers, is starting to give budget airlines a chance.

 

Last month, China's aviation regulator,
the Civil Aviation Administration of China, said it would lower barriers
for setting up a low cost airline, simplify approval procedures, cut
charges for airports in lower-tier cities and encourage older airports
to revamp terminals for budget carriers.

 

"The reins are loosened," said Will Horton, an analyst at CAPA The Center for Aviation.

 

To keep up, Asian governments are scrambling to build new terminals and runways.

 

Singapore, a wealthy city-state off the
southern tip of peninsular Malaysia, expects additions to its airport
will within a decade more than double the number of passengers it can
handle yearly to 135 million.

 

Airport construction is most rampant in
China, with authorities in the world's second-biggest economy
authorizing the construction of dozens of new airports and the expansion
of others.

 

"It is clear that airport infrastructure
must be expanded to accommodate demand," said Campbell Wilson, CEO of
Singapore-based budget carrier Scoot.

 

He said several airports in the region
are already operating near or at capacity including Hong Kong, Bangkok's
Suvarnabhumi, Manila, Jakarta and Beijing.

 

"Many more airports will soon reach their limits," said Wilson.