Small is the next big thing in Asia aviation
By Siva Govindasamy and Anshuman Daga
SINGAPORE (Reuters) - After flying under the radar for many years, manufacturers of smaller jet and propeller-driven passenger aircraft are finding a bigger market in the Asia-Pacific with a slew of orders at the Singapore Airshow.
Canada's Bombardier (BBDb.TO: Quote), Brazil's Embraer (EMBR3.SA: Quote), European joint venture ATR, Russia's Sukhoi and Japan's Mitsubishi Aircraft do not roll off the tongue as easily as Airbus (AIR.PA: Quote) or Boeing (BA.N: Quote), but in the lucrative Asia market there is room for everyone.
Embraer, the world's largest maker of regional aircraft, forecast in Singapore this week that the region will take delivery of 1,500 new jets of 70-130 seats over the next 20 years. That translates, it says, to a staggering $70 billion worth of business.
Importantly, for the likes of Embraer, the world's two largest aircraft manufacturers do not make aircraft that compete in the below-130 seat segment.
Low-cost airlines like AirAsia (AIRA.KL: Quote), Lion Air, and Cebu Pacific (CEB.PS: Quote), with orders for hundreds of Airbus A320s and Boeing 737s, have driven much of the growth in the Asia Pacific airline market.
Increasingly, however, the major hub airports are getting crowded and there is growing demand for services to and between smaller second and third tier cities.
"The great opportunity in Southeast Asia is to get more people to fly, and that is about tier two and tier three cities," said Torbjorn Karlsson, who leads aircraft sales for Bombardier in Southeast Asia.
He identified countries such as India, where only about 1 percent of country's one-billion-plus population flies, and Indonesia and Thailand as inviting markets. Continued...