AirAsia calls for ASEAN common market.
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Government & Regulation,
AirAsia
AirAsia CEO, Tony Fernandes, has called on ASEAN leaders to ensure common operational and regulatory standards across the region, to lower the cost of doing business and provide expansion opportunities.
The carrier, which has established JVs in Indonesia and Thailand, is also calling on governments to be less protective of their companies.
According to Mr Tony Fernandes, there are about 20 different aviation standards in Asean. Standardisation of policies is not only important for the aviation industry but also the other sectors.
The carrier has ambitions to build a strong ‘ASEAN brand and will rely on continuing liberalisation of aviation access to support its expansion plans. AirAsia this week took delivery of the first of 60 A320s, and plans to continue taking delivery of one to two aircraft a month between Jan-06 and 2011. The carriers rapid increase in capacity (the A320s are configured with 32 extra seats than its B737-300s) will require continued liberalisation of aviation access to be profitably deployed.
Key markets and routes, such as Singapore-Kuala Lumpur, remain protected by bilateral air service agreements. Indonesia earlier this year banned foreign LCCs from operating to four key destinations such as Denpasar and Jakarta. Since the merger between Jetstar Asia and Valuair, the interesting situation exists where the latter may operate to Indonesia (and has been expanding its network there) as it is not classified as an LCC.
Notably, AirAsia does not operate to either Hong Kong or Singapore, the regions two key business destinations.
The cross-border JV model was pioneered in the Asia Pacific by AirAsia and has been replicated by Virgin Blue (with Polynesian Blue) and Qantas (Jetstar Asia) in the past 18 months. According to an announcement at the Centre's Outlook 2006 Summit last week, Tiger Airways is likely to use the model next year, to further its international expansion plans.
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AirAsia calls for ASEAN common market. 
