Bangkok--3 Jan--Centre for Asia Pacific Aviation
Vietnam and Saudi Arabia are the Centre for Asia Pacific Aviation’s ‘markets to watch’ in 2007, as both are expected to undergo rapid development and change.
"Flag carriers of both countries are on the runway to privatisation, while low cost entry will stimulate strong rates of traffic growth over the next 12 months," according to the Centre's Executive Chairman, Peter Harbison.
Vietnam’s Pacific Airlines is restructuring and relaunching as an LCC in Feb-07 offering both domestic and international services. "It is a response to rising competition from Southeast Asian LCCs, including Tiger Airways and AirAsia, which are targeting Vietnam as a major growth market," stated Mr Harbison.
Vietnam's aviation sector is expanding rapidly, handling 4.9 million domestic and international passengers and 80,400 tonnes of freight in the first eight months of 2006, up 13.1% and 14.4% year-on-year, respectively.
Meanwhile, Saudi Arabia's aviation market is poised for significant change in 2007 as the Kingdom's first LCCs launch services. It follows a decision 18 months ago by the Supreme Economic Council to end the 60-year monopoly on domestic air services held by Saudi Arabian Airlines.
National Air Services (an established private charter operator) is expected to launch services with five single-aisle aircraft, possibly A320s, to serve domestic and later regional destinations in the Middle East. Meanwhile, Sama has been awarded the second new airline licence and will be based at Dammam, operating four aircraft initially.The LCC competition is expected to grow the Saudi market to approximately 25 million passengers within two years.
"Both countries are investing heavily in new airport infrastructure to accommodate the expected sharp increase in demand", noted to Mr Harbison.
Saudi Arabia is investing USD8 billion to expand airports including Jeddah, Medina and Tabuk, while Vietnam is developing a replacement for Ho Chi Minh City’s congested Than Son Nhat Airport, as well as several other smaller airport upgrade projects.