Securing the Future of

Asia-Pacific aviation

Vinoop Goel

Singapore 2018

How can Asia Pacific guarantee a sustainable growth?

Every day…

2Source: IATA

Average price of air travel (real terms)

3Source: IATA

Pax and freight volumes are showing robust growth…

Source: IATA 4

14.5

15.5

16.5

17.5

18.5

19.5

20.5

21.5

440

490

540

590

640

690

2012 2013 2014 2015 2016 2017

RPKs, seasonally adjusted

FTKs, seasonally adjusted

Billions per month Billions per month

…and load factors have risen for pax and freight

Source: IATA 5

41%

42%

43%

44%

45%

46%

47%

78%

79%

80%

81%

82%

83%

2012 2013 2014 2015 2016 2017

Passenger load factor, seasonally adjusted

Freight load factor, seasonally adjusted

% of ASKs % of AFTKs

Oil prices are expected to ease somewhat

Source: EIA 6

30

40

50

60

70

80

90

100

110

120

130

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Brent oil prices (US dollars per barrel)

Actual oil prices

Oil futures curve at mid-Jan 2018

But low oil prices aren’t all good news…

7Source: Blackrock, EIA, IMF

Revenue impact of a $50 fall in oil prices

20-year air passenger growth is shifting East & South

Source: IATA/Tourism Economics 8

A pivotal moment approaches…

Source: IATA/Tourism Economics 9

0%

10%

20%

30%

40%

50%

60%

70%

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

20

30

20

31

20

32

20

33

20

34

20

35

% of global O-D passengers

Within advanced markets

Within developing markets

Between advanced and developing markets

Demand for air travel to double over the next 20 years

10Source: IATA/Tourism Economics

6.7bn

3.3bn

2

3

4

5

6

7

8

9

10

2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036

Global passengers (billion, O-D basis)

Constant policies scenario

Policy stimulus and market liberalization

A Pick-up in Protectionism

Top 10 air passenger markets 2016-36

11Source: IATA/Tourism Economics

The markets of tomorrow

Source: IATA/Tourism Economics 12

Rise of Asian domestic markets

Source: IATA using data from TE/IATA Air Passenger Forecasts, September 2016

1

2

3

4

5

6

7

8

9

10

2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035

Top domestic passenger markets, ranked by passenger numbers

0

2

4

6

8

10

12

2015

US

China

Japan

Indonesia

Brazil

India

Australia

Russia

Turkey

Canada

0

2

4

6

8

10

12 China

US

India

Indonesia

Brazil

Japan

Australia

Turkey

Philippines

Mexico

13

20-year passenger growth outlook (2016-36)

14Source: IATA/Tourism Economics

North America

452m2.3%

Europe

550m2.3%

Asia Pacific

2,066m4.6%Africa

274m5.9%

Latin America

421m4.2%

Middle East

322m5.0%

15

20-year passenger growth outlook (2016-36)

Jet aircraft deliveries made & scheduled

16Source: Ascend

456520

403

134

159

179

0

100

200

300

400

500

600

700

800

2016 2017 2018

Narrowbody Widebody

# deliveries made & due

Aircraft deliveries to the Asia Pacific (1Q18 data)

Runway and passenger

terminal capacity

assessment for airports with

more than 20 million

passengers per year

100 Biggest Airports: many need to expand

Infrastructure investment already critical in Asia

52% already need

terminal capacity,

69% will need more

runways by 2030

18

$1.2 – 1.4 trillion new capital needed till 2030

19

Tourism visa openness index 2016

Source: UNWTO20

Regulatory Harmonization across Asia

Diverse regulatory maturity

Lack of unified pan-Asia political

structure

Conservative government

controls

Seamless ATMPilot Licensing

Visa policiesOperating standards

Audits

21

Asia-Pacific Regional Priorities

Safety and Security

Environment

Capacity

Cost-Efficiency

Regulatory Harmonization

22

Addressing the capacity and experience challenge

Technology

Industry standards

Border Control – visa and immigration

Smart Security

Airline-Airport-Government collaboration

23

If we get it right……

24

25