Asia's cheap airlines in safety spotlight
Saturday, 22 September 2007
Raphael Minder in Manila, Dominic Faulder in Bangkok, John Aglionby in Jakarta and Song Jung-a in Seoul
As investigators examined the wreckage on Monday of the aircraft that crashed in the Thai resort of Phuket on Sunday, broader questions were being asked about safety and maintenance on the budget airlines that have proliferated across Asia.
The tragedy is unlikely to derail the spectacular growth of the sector in Asia, analysts say.
"There may be a short-term dip [in passengers], but the long-term prospects for Asian budget airlines remain extremely good," said Derek Sadubin of the Centre for Asia Pacific Aviation.
But the crash of One-Two-Go's McDonnell Douglas MD-82 airliner, which killed at least 89 of the 130 people aboard, underlines the challenges facing the industry and regulators as they seek to accommodate the growing trade without compromising on safety.
Airbus, the European aircraft manufacturer, has forecast rapid growth for Asian low-cost airlines. Although such companies now handle 9 per cent of regional short-haul passenger traffic - compared with 31 per cent for their counterparts in North America and 26 per cent in Europe - Asian budget carriers "will be at about 40 per cent in 20 years", says John Leahy, chief commercial officer for Airbus.
However, the airlines face problems ranging from a dearth of pilots to a shortage of airport infrastructure and commercial flight paths, particularly in China, where the military controls air space.
Some budget airlines are already struggling to survive in a cut-throat Asian market, where traditional carriers, such as Singapore Airlines and Qantas, have among the world's highest efficiency and maintenance standards.
In that context, disregard for safety can spell an abrupt end, as demonstrated by another Thai budget airline, Phuket Air, which went bust in early 2006 after being blacklisted by several European countries.
Andrew Herdman, director general of the Association of Asia Pacific Airlines, says historic figures show that Asian legacy carriers, as well as big carriers in China and India, are on a par if not ahead of their counterparts worldwide in terms of safety. But there are concerns over smaller Asian airlines, which, as a group, have had about three accidents per million flights over the past five years - a rate four times higher than the worldwide average.
"The liberalisation of markets and rapid growth in the number of airlines is clearly putting pressure on regulators to keep up," said Mr Herdman.
Deregulation of Indonesia's aviation sector in 2001 resulted in the number of passengers on Indonesian carriers surging to 34m last year from 6.3m in 1999. The sector is under scrutiny after two fatal crashes earlier this year that left 124 people dead - an Adam Air Boeing 737 crashing into the sea and a Garuda Boeing 737 crashing on landing at Yogyakarta airport.
As a result, the US Federal Aviation Authority downgraded Indonesia's safety ranking. In July, the European Union banned Indonesian airlines from its borders, and recommended its citizens to avoid any domestic flying while visiting the country.
Earlier this month, Indonesia and the International Air Transport Association (IATA) held an inaugural safety awareness seminar. IATA and EU officials accept that Jakarta's aviation authorities are working hard to implement a massive reform programme.
Garuda, Indonesia's one IATA member, was audited at the end of last year, with the results yet to be verified by outsiders.
Last month, South Korea's aviation authorities signalled an investigation into low-cost carriers after an aircraft of Jeju Air, a budget airline, skidded off the runway in Busan, injuring at least 10 passengers. This followed two other accidents involving Korean budget airlines in the past year or so.
Older jets have sometimes been involved and, depending on the outcome of the Phuket investigation, One-Two-Go's fleet could also come under the spotlight. The crashed MD-82 was one of two 1983 aircraft brought out of storage in the US and put into service by One-Two-Go in March. Before Sunday's crash, the carrier had 10 aircraft, with an average age of about 23 years.
However, many Asian low-cost airlines, led by Malaysia's AirAsia, have opted for a different strategy and have established themselves as key customers for manufacturers by placing big orders for new aircraft.
........................................
FT Syndication Service
As investigators examined the wreckage on Monday of the aircraft that crashed in the Thai resort of Phuket on Sunday, broader questions were being asked about safety and maintenance on the budget airlines that have proliferated across Asia.
The tragedy is unlikely to derail the spectacular growth of the sector in Asia, analysts say.
"There may be a short-term dip [in passengers], but the long-term prospects for Asian budget airlines remain extremely good," said Derek Sadubin of the Centre for Asia Pacific Aviation.
But the crash of One-Two-Go's McDonnell Douglas MD-82 airliner, which killed at least 89 of the 130 people aboard, underlines the challenges facing the industry and regulators as they seek to accommodate the growing trade without compromising on safety.
Airbus, the European aircraft manufacturer, has forecast rapid growth for Asian low-cost airlines. Although such companies now handle 9 per cent of regional short-haul passenger traffic - compared with 31 per cent for their counterparts in North America and 26 per cent in Europe - Asian budget carriers "will be at about 40 per cent in 20 years", says John Leahy, chief commercial officer for Airbus.
However, the airlines face problems ranging from a dearth of pilots to a shortage of airport infrastructure and commercial flight paths, particularly in China, where the military controls air space.
Some budget airlines are already struggling to survive in a cut-throat Asian market, where traditional carriers, such as Singapore Airlines and Qantas, have among the world's highest efficiency and maintenance standards.
In that context, disregard for safety can spell an abrupt end, as demonstrated by another Thai budget airline, Phuket Air, which went bust in early 2006 after being blacklisted by several European countries.
Andrew Herdman, director general of the Association of Asia Pacific Airlines, says historic figures show that Asian legacy carriers, as well as big carriers in China and India, are on a par if not ahead of their counterparts worldwide in terms of safety. But there are concerns over smaller Asian airlines, which, as a group, have had about three accidents per million flights over the past five years - a rate four times higher than the worldwide average.
"The liberalisation of markets and rapid growth in the number of airlines is clearly putting pressure on regulators to keep up," said Mr Herdman.
Deregulation of Indonesia's aviation sector in 2001 resulted in the number of passengers on Indonesian carriers surging to 34m last year from 6.3m in 1999. The sector is under scrutiny after two fatal crashes earlier this year that left 124 people dead - an Adam Air Boeing 737 crashing into the sea and a Garuda Boeing 737 crashing on landing at Yogyakarta airport.
As a result, the US Federal Aviation Authority downgraded Indonesia's safety ranking. In July, the European Union banned Indonesian airlines from its borders, and recommended its citizens to avoid any domestic flying while visiting the country.
Earlier this month, Indonesia and the International Air Transport Association (IATA) held an inaugural safety awareness seminar. IATA and EU officials accept that Jakarta's aviation authorities are working hard to implement a massive reform programme.
Garuda, Indonesia's one IATA member, was audited at the end of last year, with the results yet to be verified by outsiders.
Last month, South Korea's aviation authorities signalled an investigation into low-cost carriers after an aircraft of Jeju Air, a budget airline, skidded off the runway in Busan, injuring at least 10 passengers. This followed two other accidents involving Korean budget airlines in the past year or so.
Older jets have sometimes been involved and, depending on the outcome of the Phuket investigation, One-Two-Go's fleet could also come under the spotlight. The crashed MD-82 was one of two 1983 aircraft brought out of storage in the US and put into service by One-Two-Go in March. Before Sunday's crash, the carrier had 10 aircraft, with an average age of about 23 years.
However, many Asian low-cost airlines, led by Malaysia's AirAsia, have opted for a different strategy and have established themselves as key customers for manufacturers by placing big orders for new aircraft.
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FT Syndication Service