Asia’s burgeoning aviation market outpacing regulation

HONG KONG – For Asia’s aviation industry, the growing pains have just begun.

A year of disasters, the disappearance of Flight 370 and financial turbulence highlight the challenges confronting the world’s biggest air travel market, where governments, regulators and airlines are struggling to keep up after a decade of astonishing growth.

A U.N. agency’s warning about airline safety in Thailand, one of the world’s top tourist destinations, is just the latest sign of ferment in the industry.

The boom has been driven by the region’s explosive economic growth as well as market liberalizations that have allowed dozens of new discount carriers to flourish, turning the airline business on its head.

The strains are also showing in recurring pilot shortages and shortcomings in air traffic control systems and airport infrastructure that countries are scrambling to upgrade, especially in big Southeast Asian nations such as Indonesia.

“We’re in uncharted waters,” said Desmond Ross, principal at DRA International aviation consultants and former head of the Pacific Aviation Safety Office, which oversees airline safety for South Pacific islands. “I don’t think the world has seen this sort of growth before.”

A third of airplane accidents in the Asia-Pacific region from 2008 to 2012 “involved deficiencies in regulatory oversight,” the International Civil Aviation Organization said in a report this year. Another 27 percent involved “deficiencies in safety management.”

Meanwhile, the agency’s recent audit of Thailand has produced disquieting revelations about what lies below the surface of a country that has marketed itself to the world as a safe and welcoming destination.

The agency informed governments in March of “significant safety concerns,” prompting several Asian nations to step up inspections of Thai airlines or block them from launching new flights and modifying schedules.

The leader of Thailand’s military government, which ousted its civilian predecessor in a coup last year, blamed years of neglect for allowing problems to accumulate to a critical mass. He said the civil aviation department has only 12 inspectors, a figure unchanged for years despite huge growth in tourism.

The dictator has vowed to use his authoritarian powers to overhaul aviation, but it’s unclear whether sweeping changes can be implemented fast enough to avoid a damaging downgrade of Thailand’s safety rating.

Ross said Thailand’s problems are not unique and stem from the “superfast expansion that’s been taking place over the last 10 years.” Aside from hurting tourism, the ICAO warning could also prompt insurance companies to raise their rates for airlines operating in Thailand.

Passenger numbers in Asia-Pacific have risen by a third over the past five years to 1.1 billion, and the region now accounts for 33 percent of global air passenger traffic, according to the International Air Transport Association. That proportion is forecast to grow to 42 percent within the next two decades as an extra 1.8 billion passengers take to the skies.

Another big source of concern is Indonesia, where in December an AirAsia jet carrying 162 people plummeted into the sea as it ran into stormy weather on its way from Surabaya to Singapore.

The disaster, which was the first ever fatal plane crash for the popular budget operator, was one of five suffered by Asian carriers in a 12-month span. The flight itself was unauthorized by Indonesian authorities, showing up laxness in its aviation oversight.

Flying is often the easiest travel option in Indonesia, a sprawling archipelago of 17,000 islands that’s home to 250 million people.

Despite the high profile of airline disasters in 2014, the airline industry asserts it was a relatively safe year for flying.

The total of 12 fatal accidents was below the five-year average of 19 and so called “hull losses,” the write-off of airplanes from accidents fatal or nonfatal, was its lowest ever.

But what experts say is most relevant is whether safety will be compromised as air travel expands relentlessly in a region where countries range from advanced to among the world’s poorest with huge differences in capacity to manage the safety of their air space.

“I think we’re at a turning point where we either maintain this relatively good level of safety” in Asia “or it declines,” said Ross.