Development of a Single Aviation Market Agreement for the ASEAN Secretariat

CAPA Consulting has been instrumental in developing a “global best practice” model for the establishment of a Single Aviation Market for the Association of South East Asian Nations (ASEAN) ¹.

We undertook a major project during 2008 to define the structure, implementation programme and Draft Agreement for the ASEAN SAM, as well as the region’s external relationships with dialogue partners such as China, Japan, Korea and India.

The progressive liberalisation of the ASEAN market to the point where the SAM comes into effect in 2014-15 has significant implications for governments and industry both within and outside the region. In many cases, the emerging opportunities and potential threats for airlines, airports, governments, investors, air traffic management and other service providers and tourism bodies are not fully understood or appreciated.

Aligned with its integration into an Economic Community, the ASEAN SAM will remove most impediments to market access and consolidation for intra-regional operators and provide a cohesive environment fostering high levels of growth and development. Together with its partner countries, this has the potential to become a powerful “super-bloc” to counter the European Union and North America.

While the final shape of the ASEAN SAM is still evolving, the key elements may include:

• Unlimited access by ASEAN-designated carriers to, from, beyond and within the 10 ASEAN member states; and
• New ownership and control rules freeing up cross-border investment in airlines within ASEAN.

ASEAN is already moving towards these goals with a staged removal of restrictions on 3rd, 4th and 5th freedom access. The SAM, however, will take the integration process to another level.

It recently progressed the agenda for external relationships by securing a Multilateral Agreement on Air Services with India. Similar agreements are being pursued by ASEAN with China and Japan.

¹ASEAN comprises Singapore, Malaysia, Thailand, Indonesia, The Philippines, Brunei, Cambodia, Laos, Myanmar and Vietnam.