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Sarina Houston

Infrastructure Problem in Asia

By March 25, 2012

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Maybe it's time for NextGen in Asia. As Asia anticipates more and more growth in the aviation industry, airlines and customers are left wondering how in the world the airports are going to handle it. Sound familiar?

A few years ago, when FAA officials came forward with this plan for NextGen, the forecasted growth rate was significant. We've yet to see much actual growth (at least it's slower than expected), and the consumers and airlines are left wondering if the NextGen program will be worth it in the end.

Asia, however, has seen the opposite: the growth in Asia (Indonesia, Phillipines, Singapore and Malaysia) is exceeding the infrastructure improvements. In the last 10 years, Asia has seen a surge of new airlines and routes, such as Lion Air, Air Asia X, Tiger Airways and Scoot . This means more aircraft are being purchased, which will soon join the other aircraft already in holding patterns over busy airports like Jakarta, which has a reputation for lengthy delays.

This could be a problem for airline management teams and investors. Can the airports in Asia accommodate the large number of aircraft orders recently made by airlines in Asia? If major airport improvements aren't made (and made quickly), Boeing and Airbus might be seeing some canceled orders soon.

It sounds like Asia needs a NextGen program and the U.S. needs more customers.

What do you think? Does Asia have the capacity to match the expected demand?

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