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The Honolulu Advertiser
Posted on: Thursday, February 4, 2010

Aircraft industry banking on Asia for growth

Associated Press

Hawaii news photo - The Honolulu Advertiser

This Airbus A330-200F was on display in Singapore yesterday, a day before the start of the Singapore Airshow. France's Airbus estimates Asia will need 8,000 new planes by 2028.

WONG MAYE-E | Associated Press

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"The domestic market is doing very well because of the consistent growth of our economy."

Emirsyah Satar | CEO, Garuda Indonesia airline

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SINGAPORE Aircraft makers such as EADS' Airbus and Boeing Co. are counting on Asia to pull the industry out of a slump and spur growth for years to come, executives said yesterday.

Fueled by a growing middle class eager to travel, the region will need about 8,000 planes costing $1.2 trillion by 2028, France's Airbus estimates. Passenger traffic in Asia will probably grow an annual average of 5.9 percent during the next 20 years, overtaking the U.S. and Europe to become the largest air transport market, said Airbus, the world's biggest airplane maker.

"We're very optimistic this region will play a leading role in global economic growth and particularly aviation," Airbus Chief Executive Tom Enders said at the Singapore Airshow.

Global passenger traffic dropped about 2 percent last year amid a recession in most developed countries. Most Asian countries, meanwhile, continued to expand in 2009, and growing populations and vibrant economies are making the region the center of the aviation business.

"It's basic demographics," said John Leahy, Airbus' chief operating officer.

Domestic air travel in China rose 21 percent last year, and Boeing estimates the Chinese market will need about 3,800 airplanes costing $400 billion over the next 20 years.

Aircraft makers are targeting local carriers such as Garuda Indonesia, which will receive 23 planes from Boeing Co. and one from Airbus this year, part of plan to boost its fleet by nearly 75 percent to 116 planes by 2014.

Garuda, which is owned by the Indonesian government, is planning to raise $300 million from an initial public offering this year to help pay for the expansion and better connect the country's 230 million people and 17,000 islands.

"The domestic market is doing very well because of the consistent growth of our economy," said Garuda Chief Executive Emirsyah Satar. "There's still a lot of room to grow."

EADS unit Eurocopter, which says it has about half of Asia's helicopter market, expects demand to grow at least 10 percent a year for the next decade.

If regulations that limit helicopter use in China and India are lifted, demand will explode even further, said Eurocopter CEO Lutz Bertling.

"The Asian market is for sure the fastest growing," Bertling said. "It's going to be bigger than the U.S. by 2020."