Air Transport

Restrictive government policies will impede recovery in the airline industry, says Association of Asia Pacific Airlines director general Andrew Herdman.

"In order for the industry to achieve long term sustainability and growth, it is now time for governments to wake up to the idea of removing policies that have inhibited development for decades," he says.

These policies include onerous security procedures and multiple requirements to provide passenger information.

Governments should also allow more structural reform. "They hold back consolidation, and hinder access to international capital markets," says Herdman.

While restrictive goverment policies remain the biggest challenge, he adds that low cost carriers are eroding the market share of full service carriers in the Asia Pacific.

"There are various low cost models in the region and all of them co-exist with the full service carriers," says Herdman. "Overall, however, it is true that they are gaining market share - although it is not as much as many believe. We think it is around 15% throughout the region, with more in Southeast Asia than elsewhere."

"This has an impact on the full service carriers like our members, but we must remember that many of them also have low cost operations now and so it is not as bad as it may seem."