AEC OPEN SKIES COMMENCE

On 1 January 2015 the Asean Open Skies policy commenced. Arguably, it is the first of the major platforms which are intended to be implemented and honoured across the length and breadth of Asean and should provide a partial barometer for the future of cooperation within the Asean Economic Community (AEC).

Naturally enough, the road towards its implementation was a rocky one and it was further disrupted by three serious tragedies involving aircraft from within Asean carriers in the period between March and December last year. The disappearance of one Malaysian airlines flight, the intentional downing of another over the Ukraine, and the crash of an Air Asia flight from Indonesia certainly served to focus consideration on airline safety standards and policies within Asean.

The Asean Open Skies policy is designed to provide member nations with air service liberalization, but includes setting certain standards in regards to aviation safety and security, air traffic management, civil aviation technology, and air transport regulations.

In a basic sense all of the 10 Asean member countries have now opened up their international airports to each other, with no regulatory limit in terms of frequency or capacity. Industry leaders believe the policy would provide a further boost to the Asean tourism market.

There is a general belief that the policy will lead to greater air travel demand in the Southeast Asia region, as well as an increase in passenger traffic and the movement of goods.

It should see a liberalization within the regional aviation markets which should lead to greater connectivity, traffic growth and improved service quality, while ticket prices should drift lower.

In theory the open skies policy should also lead to improved airline services in secondary cities, thereby boosting tourism into these centres, which in turn is good for general business.

Nonetheless, it’s not all positive, as restrictions still remain across certain aspects. One analyst, from the Malaysian Maybank Investment Bank, suggests there is no net benefit because while open skies exist for capital cities, there is a cap on slots, so it really doesn’t amount to a benefit.

Additionally, the granting of so-called fifth-freedom rights remains arbitrary and at the whim of the host country. A fifth freedom enables an airline to fly to two countries with a flight that originates or ends in its home country. For example, an aircraft

can take off from Singapore, pick up passengers in Bangkok and stop in Ho Chi Minh City.

The analyst did concede that it took the European Union 52 years to reach an open skies policy.

As at the time of writing, the Asean open skies policy had been ratified by all member nations, except the Philippines.