Boeing sees Southeast Asia and Thailand as keys to growth

Rising demand for new aircraft from Thailand and the rest of Southeast Asia is underpinning a bullish view by aviation firm Boeing of the United States on the aircraft market over the next two decades, as globally airlines will need over 41,000 new planes between now and 2036, the company’s managing director said last week.

“Air traffic is expected to rise by 7.2 per cent a year until 2036 and this will see airlines expand their fleets to better serve demand,” Jim Freitas, managing director, product marketing and analysis at Boeing Commercial Airplanes told reporters last week during a press conference in Seattle, Washington, where the company has its headquarters.

The number and frequency of flights in and out of Thailand has been relentlessly rising in recent years, with Airports of Thailand reporting record numbers of aircraft movements at the six major Thai airports it manages nearly every year for the past few years. To handle the growing number of flights, several major Thai airports, including Suvarnabhumi and Don Muang, are undergoing renovations to expand because their capacities have already been exceeded.

One of the reasons for that growth has been the emergence and success of the many budget airlines based in Thailand and the region. Freitas listed that as one of the factors that will lead to Boeing making more sales in the Kingdom and the region. Other factors include the liberalization of intra-regional traffic, an open skies policy with China, and a growing middle class that is proving to be the main driver of air traffic growth in Southeast Asia.

Nonetheless, he said that Southeast Asian governments would need to commit to larger investments in infrastructure in order to be able to handle the growing traffic.

According to Boeing’s forecasts, Southeast Asia will need 4,210 new aircraft worth at $645 billion over the next 20 years. Single-aisle models would account for 3,230 aircraft, small airplanes 610, medium and large models 320, regional jets 40 and freighters 10.

Freitas noted that the business model for Southeast Asian airlines is changing and that by 2036 low cost and budget airlines would account for 52 percent of new aircraft purchases, up from 38 percent last year.

But while budget airlines are major buyers of single-aisle aircraft, Boeing’s most popular sellers are the aircraft in its 787 Dreamliner family, the upper end of the size spectrum.

Usanee Sangsingkeo, acting president of THAI Airways International, said the growth in air traffic presents good opportunities for the national carrier, while also acknowledging that budget airlines were giving THAI more competition.

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