ASEAN is some distance away from achieving a truly single aviation market, with three member states yet to fully ratify multi-lateral air service agreements by the 2015 year-end deadline.

Agreements were supposed to be in place for airlines from the 10 member states to operate freely from their home country to any city within the bloc by 2015. Indonesia, Philippines and Laos however have yet to ratify a deal.

While Indonesia has only opened up Jakarta, the Philippines is barring Manila from the pact, and Laos has yet to open up Vientiane and Luang Prabang.

Wolfgang Sander-Fischer, air transport expert for the ASEAN Air Transport Integration Project, says that aside from the missing ratifications, accompanying harmonised economic and market law agreements are also yet to be agreed by all 10 member states.

“The problem with ASEAN is that it’s not a top down organisation but built on consensus… so the pace of implementation varies and you’ve got some countries which are slower than others,” says Andrew Herdman, director general of the Association of Asia Pacific Airlines.


Another issue is that several of the countries, such as Indonesia and Thailand, fail to fully meet ICAO standards and the audit requirements of states such as the US and the European Union. This could hamper the further development of the open skies, says Sander-Fischer.

Seventh freedom and domestic operations by foreign carriers have also yet to be contemplated. These rights will allow airlines to establish bases outside of their home country without requiring 51% local ownership.

The concern for some countries is that their airlines will not be able to compete effectively with stronger peers, and hence lose market share. With an uneven level of development and competitiveness among member states and airlines, some carriers believe they have more to lose.

Aviation law professor Alan Tan says member states also need a united stand to avoid losing out in negotiations with other countries and blocs. An example is the ASEAN-China bilateral agreement, which allows Chinese carriers to connect with all points in ASEAN, while an ASEAN carrier can only penetrate Chinese points from its home country.

"This presents a serious network imbalance that can only be rectified by the ASEAN states treating their own backyard as a true common market," he adds.


Herdman is of the view that the slow liberalisation of traffic rights does not constrain growth of the region’s air travel demand, although it may affect who gets to serve that demand. What is more concerning, he says, is the congestion at the region’s hubs – both in terms of infrastructure and air traffic management.

Some of region's airports, including Bangkok's Suvarnabhumi International and Jakarta's Soekarno-Hatta International, have for years been operating above their design capacity.

Data from ASEAN shows that annual capacity on intra-ASEAN arrivals has increased steadily over the years, from 37.4 million in 2007 to 46.8 million in 2010 and 69.6 million in 2014. Achieving open skies will only drive the figure higher.

“Only regionally harmonised approaches to airport development and utilisation as well as to air traffic management will yield best utilisation of airport, airspace and other resources,” says Sander-Fischer.

“Only an ASEAN-wide economic playing field will allow unimpeded competition among carriers of all member states, bringing out full benefits for consumers.”

Data from Flightglobal's schedules specialist Innovata shows over there 34,000 intra-Asean flights in January, led by flights from Singapore and Malaysia.

Asean countries overall Jan 16 share

Innovata data shows the markets with the largest capacity in January are between Indonesia, Malaysia and Singapore.

Asean countries routes Jan 16 share

Source: Cirium Dashboard