Rising Skies in Southeast Asia: Why are South East Asian Countries Suddenly Expanding & Building New Mega-sized Airports?

• 5 November 2023
• Local News
• 6044 Views

The azure skies of Southeast Asia are in the midst of a remarkable transformation. Seven ASEAN countries are embarking on ambitious airport expansion projects, reflecting the region’s remarkable growth and the pressing need to meet burgeoning demand. Research by Nikkei predicts that the annual passenger capacity at airports in the capitals of these nations will soar to a staggering 653 million by 2030, nearly doubling from 336 million passengers in January 2023. What fuels this aviation revolution, and what does it mean for the region?

Southeast Asia’s Aviation Projects: A Glimpse into the Future

Thailand: Thailand’s Suvarnabhumi Airport expansion initiative, which commenced in July 2022, will increase its capacity by 30% to accommodate up to 60 million passengers annually. Plans are afoot for a second terminal and runway by 2030, elevating the total capacity of airports in the Thai metropolitan area to a monumental 200 million by 2030.

Vietnam: The Long Thanh International Airport, set to welcome its first flight by 2050, will be a game-changer. It boasts the ability to serve 100 million passengers and manage five million tonnes of cargo yearly, setting new industry standards.

Cambodia: The recently launched Siem Reap-Angkor International Airport, with its capacity to handle seven million passengers and 10,000 tons of cargo per year, marks a significant stride in Cambodia’s aviation landscape. Meanwhile, the Techo Takhmao International Airport, one of the world’s largest at 26,000 hectares, is under construction, alongside several other aviation upgrades​ including the new airport feasibility study in Koh Rong aimed at boosting infrastructure and attracting global investments.

Malaysia: The expansion of Penang International Airport, though delayed by the COVID-19 pandemic, is set to revive with Malaysia Airports Holdings Berhad actively assessing the scope of expansion, reaffirming their commitment to this significant project.

Singapore: Singapore’s Changi Airport Terminal 5 project, initially delayed due to the pandemic’s uncertainty, is now under review by the Ministry of Transport. Its outcome will significantly impact the nation’s aviation landscape.

Driving Factors Behind Southeast Asia’s Aviation Expansion

Economic Growth: The International Air Transport Association (IATA) reports that aviation’s global economic impact is valued at a staggering US$3.5 trillion, contributing 4.1% to the world’s GDP and supporting 87.7 million jobs. Southeast Asia’s aviation market is projected to reach US$43.57 billion by 2028, growing at a CAGR of 4.84%. The region anticipates the delivery of around 3,000 new commercial aircraft by 2032, according to Mordor Intelligence.

Rising Domestic Demand: Southeast Asia’s expanding middle class and their increased affordability for air travel are driving the surge in demand for air travel, making the expansion of aviation infrastructure an imperative measure.

Attracting Investment and Travel: The ongoing airport expansion in Southeast Asia aligns with a confluence of economic, social, and political factors. The enhanced air connectivity between ASEAN cities acts as a vital catalyst for regional economic growth and prosperity. This expansion generates job opportunities and enhances economic activity, ultimately contributing to heightened productivity levels and GDP growth. IATA research has found evidence that a 10% increase in air connectivity will boost a country’s productivity-related labour productivity (GDP) by 0.07%.

• Analysis
• Economy and Finance
• Airport and Aviation