Asian airlines growth plans hit by overstretched airports

It's a scene repeated endlessly at most of Southeast Asia's main airports — planes forced to circle overhead or idle on the tarmac and travellers stuck in serpentine queues at immigration desks, security checkpoints and baggage carousels. And it's likely to get worse in capitals like Kuala Lumpur, Jakarta, Bangkok and Manila in years to come as overcrowded airports and outdated infrastructure are twinned with a huge spike in the number of aircraft in the region. Southeast Asian carriers have ordered $47 billion (Dh172.58 billion) worth of aircraft for the coming decade but the deals could be under threat because of the inability of airports to keep pace. That could be a blow to manufacturers like Boeing and Airbus. "You can buy as many aircraft as you like, but if the infrastructure does not keep up then you are going to see a degraded service that may prevent you from executing plans to grow the airline," Andrew Herdman, director general of the Association of Asia Pacific Airlines, told Reuters. The problem could force low-cost carriers such as Malaysia's AirAsia and Indonesia's privately held Lion Air — the world's biggest buyers of passenger jets — to delay or even cancel some orders from Airbus and Boeing. Jakarta's Soekarno-Hatta International Airport now serves more than 51 million passengers a year, more than twice its design cap-acity when it was built in the mid-1980s. Bangkok's main Suvarnabhumi Airport is often beset by two-hour immigration queues and is running over capacity less than six years after it opened, which led Thailand's government to encourage low-cost carriers to move to the old Don Muang Airport to help ease congestion. Passengers can wait for hours at Kuala Lumpur's overcrowded budget terminal, the hub for AirAsia. After clearing immigration lines that can be at least 50 people long, the walk to the plane at the tarmac can be hundreds of metres with only a strip of corrugated steel overhead as cover against the elements. With pressure from AirAsia and scenes of chaotic check-ins, government-linked operator Malaysia Airports is rushing to complete another budget terminal that is due to be up and running by April next year. Projected construction costs have nearly doubled to 3.9 billion ringgit (Dh4.62 billion) as the planned capacity of the new airport has been expanded to 45 million passengers a year from an initial plan of 30 million. Jakarta's airport is infamous for planes sitting for nearly an hour on the tarmac before take-off or circling overhead as they await their turn to land. One-hour flights between Singapore and Jakarta can easily drag to two hours or more because of the overcrowded runway. Growing networks The number of low-cost carriers (LCC) and their routes have expanded rapidly in Southeast Asia over the last decade. Analysts and industry executives see more growth ahead due to a lack of reliable alternatives and strong economic growth. "Ten years ago, the airports in this region would probably not have foreseen that LCC demand could be as strong as it is today," Chin Yau Seng, chief executive officer of Singapore-based budget carrier Tiger Airways, told Reuters. Airport congestion makes it tougher for carriers to keep their on-time performance and pushes up operating costs as planes waste fuel waiting to take off or land. "If this problem persists for the long run, airlines in general will have to take into account all the additional costs that they have to incur and pass them on to customers," Edward Sirait, a director at Lion Air, said. Lion recently firmed up an order for 230 Boeing 737s worth $22.4 billion, eclipsing the record for the world's biggest commercial aircraft deal set by AirAsia when it signed up to buy 200 Airbus A320neo jets for $18 billion. Despite the growth and big orders, Southeast Asia remains a market that has been underserved by carriers. Underserved market Con Korfiatis, vice-president of Garuda, Indonesia's budget carrier Citilink, said only 300 single-aisle jets serve the country's population of 230 million, compared with 3,000 in the United States, which has 310 million people. Boeing sees Asia-Pacific carriers as the biggest buyers of planes over the 20-year period to 2030 as they are expected to acquire 11,450 passenger jets valued at $1.5 trillion — more than a third of global demand. Singapore's Changi Airport plans to build a fourth terminal that will boost total capacity to 82 million passengers a year from the current 73 million when it is completed in 2017. Changi's average annual passenger growth has been 12 per cent in each of the past two years, far higher than the average for the past seven years of 8 per cent. In the meantime, travellers must just do their best. "Your job as a passenger who is flying out from Jakarta is as complicated as the pilot," said one executive at a European investment bank who asked not to be identified.